Footwear manufacturers urge government to crack down on illegal imports

While appreciating the government’s policy measure of curtailing footwear imports, Sri Lanka’s footwear and leather products manufacturers are urging the authorities to crack down on illegal imports as well.

The Sri Lanka Footwear & Leather Products Manufacturers Association had made strong representations against imposing import duty as Rs. 100 flat rate in the 2012 Budget as well as making it free of duty in the 2016 Budget.

This was the only unessential consumer product treated with duty free import facility.

In the past year they have voiced their concern in many different forums on the adverse effect the local industry faced due to the illegally imported footwear to Sri Lanka.

But no action had been taken by the Treasury to find some redress for the industry which is now on the verge of collapse due to a flood of imported shoes in the market, the association said.

The proposals submitted by the association have been accepted at the pre budgetary meetings but later it was rejected at the last minute, members of the association alleged.

“Footwear and several other goods are imported without pay- ing legitimate duty and dumped into the market and selling less than Rs. 500 when the minimum duty is Rs. 500. All the invoices are under invoiced and most goods imported are stock lots,” an association spokesman said.

Sri Lanka Customs should take stern action against smuggling of footwear and leather products as well as unassembled parts of shoes for assembly in Sri Lanka, he suggested.

According to estimates of the association, over 40,000 pairs of footwear are illegally smuggled to Sri Lanka daily through boats from India and through unaccompanied cargo air and sea both ways.

The Sri Lankan annual footwear requirement stands around 60 to 70 million pairs worth Rs. 70 billion. In 2012 the local share was 70 per cent and this is decreasing to an alarming level of 55 to 60 per cent mainly due to the influx of illegal imports.

The association urged the government to carry out raids in the market and do backward audits on how dealers sell imported shoes at such a low price.

The association will not only help the Government to increase their revenue and avoid the impending collapse of the Sri industry, he added.