Economy
How Tamil Nadu leveraged China+1 strategy in non-leather footwear space
Summary
- India's rise in global footwear production offers a unique opportunity as brands move away from China. Tamil Nadu’s strategic focus on investment and women-centric employment has helped the state capture a growing share of the market.
For years, China was the epicentre of global footwear manufacturing, producing nearly 72% of the world’s shoes in 2016. From Nike to Adidas, Puma, Crocs, and New Balance, virtually every major brand relied on China for production. But today, a fundamental shift is underway.
The trade war under Donald Trump, followed by pandemic-driven supply chain disruptions, forced manufacturers to reduce their reliance on China. Rising labor costs and mounting geopolitical tensions over Taiwan further reinforced the need for diversification. Vietnam was the first to benefit, with its share of global footwear exports rising from 12% in 2016 to 16% in 2021, as companies adopted the China+1 strategy.
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Now, India is beginning to make its mark—one of the rare instances where the China+1 strategy has truly worked. Tamil Nadu, long a leader in leather footwear manufacturing, is now at the forefront of the shift to non-leather footwear, a trend highlighted in the Economic Survey 2025.
Some of the world’s largest contract manufacturers for Nike, Crocs, New Balance, Adidas, and Puma have already set up or are in the process of establishing operations in the state. These include major Taiwanese manufacturers such as Hon Fu Group, Feng Tey, Pou Chen, and Shoetown Footwear Group, who have collectively invested ₹6,500 crore and created 86,000 jobs.
The surge isn’t accidental. Tamil Nadu’s government made a deliberate push to position itself as a footwear manufacturing hub.
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“It was a conscious decision by the Tamil Nadu government to accord utmost importance to this sector for multiple reasons," said Arun Roy, secretary, industry, government of Tamil Nadu. “One, footwear investments have very high investment potential. Two, they typically operate in rural areas and finally, they employ women predominantly."
To capitalize on this, Tamil Nadu introduced the Footwear and Leather Products Policy in 2022, offering a suite of incentives to attract global players. The state also proactively engaged with major manufacturers, leveraging its skilled workforce and established industrial base in leather footwear to make the transition into non-leather production smoother.
“The state had excellent human resources and a strong industrial base," Roy added.
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Today, Tamil Nadu accounts for 38% of India’s total footwear and leather products output, cementing its place as a rising force in global footwear manufacturing.
