- Tax Burden on Essentials: CAIT reports that 90% of Indian consumers purchase footwear priced below ₹1,000, yet these items currently face a 12% GST rate, up from the historical 5%.
- Regulatory Hurdles: The trade body is urging the government to rationalise Bureau of Indian Standards (BIS) mandates, arguing that “one-size-fits-all” quality standards are impractical for small-scale manufacturers and diverse economic strata.
- Economic Inclusion: Secretary General Praveen Khandelwal has requested high-level meetings with the Finance and Commerce Ministries to align footwear policies with the realities of India’s multi-layered consumer market.
The humble pair of slippers, once a basic necessity for every Indian household, has become the center of a mounting economic debate. As the nation navigates the complexities of the 2026 retail landscape, the Confederation of All India Traders (CAIT) has stepped forward to demand a radical rethink of how the footwear industry is taxed and regulated. With inflation concerns lingering and the push for quality standards intensifying, the trade body argues that the current “one-size-fits-all” approach is stifling small businesses and penalizing the common man.
The GST Disconnect: From 5% to 12%
For decades, footwear priced below ₹1,000 was treated as an essential commodity, attracting a modest 5% Goods and Services Tax (GST). However, the shift to a uniform 12% slab—which began in early 2022—continues to be a point of friction for the trading community. CAIT asserts that this 140% increase in the tax rate has disproportionately affected the lower-income demographic, who form the bedrock of the industry’s volume.
“India is a land of diversity where consumers range from an ordinary person to the most affluent class,” stated Praveen Khandelwal, Secretary General of CAIT. He emphasized that purchase behavior is strictly governed by economic strata, and the current tax structure fails to provide the “equitable strength” needed to prevent tax evasion and encourage compliance. As retailers integrate new technologies into the payment ecosystem to streamline transactions, the underlying tax burden remains a primary concern for the 2026 fiscal year.
Market Insight:
Approximately 90% of the Indian population consumes footwear priced under ₹1,000. Within this segment, the vast majority opt for products costing no more than ₹500.
The BIS Quality Standard Challenge
Beyond taxation, the implementation of Bureau of Indian Standards (BIS) mandates has created a logistical bottleneck for small and medium enterprises (MSMEs). While the government’s intent is to elevate Indian manufacturing to global levels, CAIT argues that the technical requirements are often too stringent for traditional cobblers and micro-units to meet without significant subsidies or transition periods.
The trade body has officially sought an audience with Union Finance Minister Nirmala Sitharaman and Commerce Minister Piyush Goyal to discuss these “genuine concerns.” The goal is to create a tiered system where quality standards are balanced against the manufacturing capabilities of local artisans. This regulatory evolution is crucial as the sector looks toward supply chain efficiencies to lower costs in an increasingly competitive global market.
| Category | Pre-2022 GST | 2026 GST Rate | CAIT Recommendation |
|---|---|---|---|
| Footwear < ₹1,000 | 5% | 12% | Revert to 5% |
| Footwear > ₹1,000 | 12% | 12% | Maintain 12% |
| BIS Compliance | Not Applicable | Mandatory | Rationalize for MSMEs |
A Path Toward Rationalization
The footwear industry is a significant employer in India’s informal sector. CAIT’s push for rationalization isn’t just about reducing costs—it’s about ensuring the survival of millions of small-scale retailers. According to official data from the Ministry of Commerce and Industry, the footwear sector is a key pillar of the “Make in India” initiative, but traders warn that over-regulation could lead to a rise in unorganized, non-compliant sales.
Khandelwal remains optimistic that a dialogue-based approach will yield results. “We hope that through constructive talks with the Union Ministers, we can find a middle ground that ensures high quality for consumers without pricing the common man out of the market,” he concluded. For now, the industry awaits a signal from the Centre that could either provide much-needed relief or solidify the current high-tax, high-compliance regime.
“Ninety percent of the people in India are consuming footwear of not above Rs 1,000. Imposing the same standards and tax slabs for all is not just impractical; it’s an economic deterrent for the masses.”
— Praveen Khandelwal, CAIT Secretary General
