India's Leather Industry Seeks Import Duty Exemptions Amidst Rising Costs
Industry representatives urge government relief on raw materials and machinery due to Middle East crisis impacting supply chains.
En resumen
- India's leather and footwear sector is grappling with a 40-60% surge in input costs due to the Middle East crisis.
- The industry is petitioning the government for import duty exemptions on critical raw materials, machinery, and components to mitigate these rising expenses.
Resumen generado por IA
Por qué importa
India's leather and footwear industry is experiencing severe cost increases due to disruptions in the Middle East, prompting calls for government intervention. The crisis has affected the movement of oil and gas vessels, impacting the supply of petroleum-based materials crucial for the sector.
India’s leather and footwear industry is grappling with high input costs exacerbated by the ongoing Middle East crisis. The sector is seeking exemptions from import duties on essential raw materials, machinery, and components.
Industry representatives have communicated these concerns to the commerce and industry ministry, warning that the disruption has led to a sharp increase of 40% to 60% in the cost of several crucial inputs.
"The industry is facing a sharp increase in raw material and input costs - rising by 40-60% - due to the West Asia crisis," an official told PTI. "In view of this, we have urged the government to provide import duty exemptions on critical inputs such as synthetic leather (PU-coated fabrics), footwear components, metal accessories, leather and footwear machinery, threads, moulds, toe puffs, eyelets, certain leather chemicals and packaging materials."
Alongside duty relief, exporters have recommended the early execution of the proposed FLOAT (Footwear and leather oriented transformation) scheme. They advocate for its coverage to extend across the full leather and footwear product chain, including raw materials, machinery, and inputs.
The industry has also pressed for duty-free imports of crust and finished leather as part of efforts to strengthen domestic manufacturing.
A major concern for the sector is the impact of Iran’s closure of the Strait of Hormuz, which has affected oil and gas vessel movement. Since products such as PU leather, certain rubber chemicals, adhesives, plastics, and shoe soles are petroleum-based, supply disruptions have pushed costs significantly higher.
Apart from petroleum-linked materials, the domestic industry also relies on imports from China, Korea, Indonesia, and Japan for several inputs. Imports in the sector fell 4.49% year-on-year to $938 million during the 2025-26 fiscal year.
On the export front, leather and leather product shipments declined 2.36% year-on-year to $4.26 billion in 2025-26. However, according to industry estimates, total exports could rise to $5.6 billion once non-leather goods figures are added.
Overall exports from the sector, covering finished leather, leather footwear, footwear components, leather garments, leather goods, saddlery and harness, non-leather footwear, non-leather goods, and fur and fur products, reached $5.57 billion in 2024-25, compared to $5.38 billion in 2023-24 and $6 billion in 2022-23.
Qué observar
Perspectiva de IA — posibilidades, no hechos
The Indian government will likely consider some form of import duty relief for critical inputs to support the leather and footwear industry.
Probable · En semanas
The proposed FLOAT scheme will be fast-tracked or modified to include raw materials and inputs.
Posible · En meses
Further decline in leather and leather product exports in the short term if no immediate relief is provided.
Probable · Corto plazo
Preguntas abiertas
- What specific measures will the government consider in response to the industry's requests?
- What is the projected timeline for the execution of the FLOAT scheme?
- How will the proposed duty exemptions specifically impact the pricing of finished leather and footwear products?
- What are the potential long-term consequences for India's leather exports if no relief is provided?
