NEW DELHI: The appreciation in the value of the rupee against major currencies, weak consumer sentiment in the European Union (EU) and significant drop in the value of the British pound (GBP) has hit footwear exporters hard and they are now focusing on domestic market to fare better, a report said.
Leather and leather footwear export has been facing significant hurdles due to a challenging internal as well as external environment.
Demand has been impacted due to the weak consumer sentiment in the European Union (EU) - the biggest destination of India's footwear exports and a significant drop in the value of the British Pound (GBP) following the vote on referendum to exit the European Union, rating agency ICRA said in its report.
The sector is also facing headwinds due to appreciation in the value of the rupee against major currencies and recent regulatory restrictions placed on slaughter of animals and on leather tanneries, impacting raw material availability. Because of these factors, the export figures show a decline for two consecutive years, by 9 per cent in FY16 and 5 per cent in FY17.
ICRA expects similar trends to continue in the near term which should impact the earnings of export focussed leather footwear players.