Against the growing anti-China sentiment, global sportswear makers, who source a large chunk of their raw materials from the country are planning to shift sourcing and manufacturing to India and Southeast Asia. Global retailers and brands are ready to hedge sourcing to different markets other than China for the goods they sell in India. Under Armour whose merchandise suppliers are based around the world does not foresee any significant impact on its India business as a result of any duties or curbs that the government may introduce.
However, manufacturing in India may push up costs for these sportswear companies. Domestic manufacturers have not yet developed scale, as a result of which brands will find it dearer in the beginning to move sourcing and production of finished goods to India. According to the managing director of a home-grown footwear manufacturing company, China has scale and makes for the world, while India only makes for domestic consumption. He hopes India to achieve similar scale over time. It will take brands at least two years to move their production out of China.
A senior executive of a footwear retail chain says, despite the government taking efforts to ramp up duty on goods coming in from China, a large part of the hundreds a of containers that arrive on Indian shores every day are under-invoiced. This is counterproductive for domestic manufacturers.