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India gains as EU cuts Chinese shoe imports

India is one of the three Asian countries to gain after the European Union (EU) imposed anti-dumping tariffs on Chinese leather shoes.

india Updated: Oct 17, 2006 17:41 IST

India is one of the three Asian countries to gain after the European Union (EU) imposed anti-dumping tariffs on Chinese leather shoes.

Groupe Royer of France has cut imports of Chinese leather shoes by 85 percent this year, said company designer Romain Tamalet.

His company, which normally bought 20 million pairs of shoes from China, has now turned to India, Thailand and Indonesia for leather shoes.

Chinese leather-shoe manufacturers have been experiencing drop in orders from Europe due to the anti-dumping tariffs imposed by the European Union (EU) on leather shoes manufactured in the country.

"We have seen almost no European buyers visit our stall the whole day," said Wu Liming, a worker with the international trade department of the Kangnai Group Co Ltd, one of China's biggest shoemakers, at the ongoing Canton Fair in Guangzhou, in China's Guangdong province.

Wu said the absence of European buyers was in contrast to the previous bi-annual export fair, where his company had many buyers from France, Denmark and Britain.

About 60 percent of the company's exports normally went to Europe, but the new tariffs, which would no doubt lead to increase in shoe prices in Europe, would compel European buyers to find suppliers from other countries, said Wu.

The EU decided to impose two-year duties of 16.5 percent on Chinese leather shoes from October 7.

The Chinese shoemakers are planning to file a suit in the European Court of Justice against the EU tariffs.

China's commerce ministry said last week that it backed the efforts by Chinese shoemakers to safeguard their legitimate interests.

"We have seen a slight drop in orders from Europe this year," said Yang Qiuxia, assistant president of the Hazan Shoes Co Ltd, based in Wenzhou, a major shoemaking base in east China's Zhejiang province.

Orders from small buyers have fallen drastically, said Yang, though orders from the big buyers with greater capacity to compete have not been affected much.

European buyers have begun to buy shoes made of non-leather materials that are unaffected by the new tariffs in China.

Tamalet of Groupe Royer of France said: "For us, the new tariff is no good. Now we are obliged to import fewer leather shoes".

Other buyers from Europe are showing more interest in slippers or textile shoes at the fair.

In the new scenario, the Chinese shoemakers have been exploring ways to compensate for the loss of business.

Kangnai Group has decided to open more speciality stores abroad to ensure its overseas markets.

"We have more than 100 specialty stores in 20 countries, including European countries," Wu said.

The company planned to open 1,000 speciality stores overseas in the next five years, he said. Speciality stores benefited by bypassing retail selling, said Wu.

Hazan Shoes has a factory in Nigeria and purchased a shoemaking factory in Italy, said Yang.

Shifting production abroad would help the Chinese shoemakers avoid the anti-dumping tariffs.

Other manufacturers have begun to extend their overseas markets, finding new buyers in North America, rather than relying too much on the European market.

First Published: Oct 17, 2006 17:41 IST