Bata India, Metro Brands, Campus Activewear, and Mirza International were among the footwear stocks that surged up to 10.5% in intraday trade on Thursday, September 4, as investors cheered the GST rate cut on footwear, lifting hopes of improved demand and margins for these companies.
The GST Council, chaired by Finance Minister Nirmala Sitharaman, on Wednesday announced a cut in GST on footwear priced up to ₹2,500, reducing the rate to 5% from an earlier 12%.
Previously, the 5% GST slab applied only to pairs priced up to ₹1,000, but with this move, the benefit has now been extended to products priced up to ₹2,500 apiece.
Following the announcement, footwear stocks opened the session with a gap-up and extended gains during the first half. Bata India rose 7.3% to an intraday high of ₹1,247, Metro Brands gained 6% to ₹1,242, and Campus Activewear jumped 10.5%.
Other footwear companies, including Mirza International, N B Footwear, Lehar Footwears, Khadim India, and Relaxo Footwears, also advanced between 1% and 6%.
The GST Council, on September 3, approved a major simplification of the tax structure, collapsing four tax slabs (5%, 12%, 18%, and 28%) into just two slabs: 5% and 18%.
A special 40% rate will apply to select luxury and sin goods, a major change since the GST rollout in 2017, which is part of government reforms along with other fiscal measures like RBI rate cuts and income tax rebates, which are poised to recharge consumer demand.
The new rates are likely to bring down prices across a wide range of items, from daily essentials to cars, bikes, and electronic goods, and will come into effect from September 22, the first day of Navaratri.
India’s $ 17.9 billion footwear market set for next leg of expansion
Campus Activewear said that the GST Council’s decision to rationalise the tax on footwear priced up to ₹2,500 per pair from 12% to 5% is set to drive the next phase of growth for India’s footwear industry.
Currently valued at USD 17.9 billion and projected to grow at a 12% CAGR, India is the world’s second-largest manufacturer and consumer of footwear, producing nearly 3 billion pairs annually.
The company noted that the sports and athleisure category already accounts for two-thirds of the market, reflecting rising consumer aspirations and the growing demand for affordable, design-led footwear across Tier I, II, and III markets.
It added that the reduction in GST, along with similar cuts on daily essentials, will directly boost household savings, strengthen consumer purchasing power, and expand access to branded products.
Commenting on the development, Mr. Nikhil Aggarwal, Whole Time Director & Chief Executive Officer, Campus Activewear, said, “The GST Council’s decision is a transformative step that strengthens consumer affordability, expands the addressable market, and accelerates the formalisation of India’s footwear industry.”
“For a consumption-driven economy like ours, this measure will fuel demand across categories, especially in sports and athleisure, which already dominate two-thirds of the market. At Campus, our purpose has always been to democratise fashion by making premium, design-led footwear accessible at affordable price points tailored to Indian consumers. This reform will not only benefit millions of consumers but also empower domestic manufacturers like us to scale faster, innovate deeper, and contribute to India’s broader growth story,” he further added.
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