Opposition mounts against Indian footwear entry

Pressure is mounting against the entry of an Indian footwear manufacturer into the domestic Sri Lanka market with local shoe manufacturers and private sector companies jointly opposing and, now joined by trade unions.

Sources at leading footwear manufacturers like DSI and Bata who provide subcontracts to local manufacturers to supply their needs, say local manufacturers will be serious affected.

When the issue was raised at the request of local manufacturers at a meeting on Wednesday by Palitha Athukorala, Secretary of IndustriALL Sri Lanka Council who is also a veteran trade unionist, Labour Minister John Seneviratne – who also expressed opposition to the Indian footwear entry – said he would brief the President and raise the issue before the Cabinet Committee on Economic Management ( CCEM). He requested Mr. Athukorala to provide more details of the investment by India’s Veekesy Slippers Lanka Pvt Ltd which has already set up a factory in Negombo.

Several other officials representing different segments of business and chambers of commerce voiced their concerns at Wednesday’s meeting of the National Labour Advisory Council ( NLAC). Union representatives from Bata said their management was also concerned about the development as it would affect SME companies which supply to them.

The Indian company has got approval under Section 16 of the Board of Investment rules which allow projects with a minimum US$ 250,000 investment. This section permits investors’ unlimited access to the local market sales.

“This will be a precedent and open the floodgates for Indian investment through this section to set up factories to manufacture products like confectioneries, biscuits, readymade garments, cable, vegetable products and even enter retail trade in a big way,” an association spokesperson said

Veekesy is part of Indian footwear conglomerate VKC, established in 1984 and now India’s largest PU ( polyurethane) footwear manufacturer. Its daily production is 400,000 pairs.