US tariffs may drive footwear giants like Nike, Adidas, and Puma to increase manufacturing in India, which benefits from lower tariffs and competitive wages. The shift is expected to accelerate India's growth as a major production hub for global brands. In FY24, 50% of Nike’s footwear came from Vietnam while 39% of Adidas’ footwear sourcing came from the country. US President Donald Trump’s retaliatory tariffs on global imports are likely to speed up the shift in production by footwear giants like Nike, Puma, and Adidas to India, which now faces lower tariffs than its competitors, according to experts. Shares of Nike fell 10% to their lowest since 2017, while Adidas dropped 11% and Puma declined 10%, as the new tariffs are expected to increase sneaker prices sharply. A Reuters report citing UBS analysts noted that US retailers may need to raise prices by 10–12% to offset the impact on Vietnamese-made products alone. India’s non-leather footwear exports to the US earlier faced tariff rates of 10–12%, compared to Vietnam’s average of 13.6%. However, under the new tariff structure, Vietnam could see duties rise to as high as 60% on some non-leather footwear categories, while India’s revised tariff is expected to be around 36%. Tariffs on Chinese goods will rise 34% on top of the 20% already imposed earlier this year, bringing the total to 54%. ‘Over the last decade, Nike, Adidas, and Puma placed big bets on Vietnam,’ said an industry executive. ‘With the latest tariff hikes, India—particularly Tamil Nadu—is emerging as the next major hub for manufacturing.’ India’s non-leather footwear accounts for 86% of global usage. Taiwanese contract manufacturers such as Feng Tay, Shoe Town, Pou Chen Corp, and Hong Fu have either set up or are in the process of establishing facilities in Tamil Nadu, with investments totalling around ?18,000 crore. For example, JR One Kothari’s factory in Tamil Nadu’s Perambalur district, a joint venture between KICL and Taiwan’s Shoe Town Group, began operations in November and has already produced over 2 million Crocs for domestic and global markets. KICL has also signed an MoU with the state government to invest ?5,000 crore to manufacture Adidas shoes. ‘As an industrialist and foreign collaborator, I believe this tariff shift will drive more investment into India,’ Ahmed added. An industry expert also highlighted India’s competitive wage costs—$0.90 per hour, compared to China ($3), Vietnam ($2), and Indonesia ($1.50)—as a significant factor. ‘Brands can pass on at most a 10–12% price hike to consumers, but these tariffs are too steep. Cutting production costs is the only viable path, and India stands to gain if companies move in that direction,’ the expert said.

US tariffs may drive Nike, Adidas to boost India manufacturing

US tariffs on footwear imports are likely to drive global brands like Nike, Adidas, and Puma to increase manufacturing in India, which benefits from lower tariffs and competitive wages. The shift is expected to accelerate India's growth as a major production hub for global brands. Under the new tariff structure, India's non-leather footwear exports to the US are expected to face tariffs around 36%, compared to Vietnam's potential tariffs of 60%. This shift is expected to benefit Indian states like Tamil Nadu, where Taiwanese contract manufacturers have already set up facilities. The tariffs are also expected to push brands to cut production costs, further boosting investments in India.