Budget 2024-25 Cuts Customs Duty on Inputs for Leather Industry

The Union Budget 2024-25 has introduced several measures to stimulate growth in the leather industry. These measures include the reduction or removal of customs duty on certain inputs used in the textile and leather sectors. As per the new budgetary provisions, inputs for leather products—such as wet white, crust, and finished leather for the manufacture of garments, footwear, and other leather products for export—will attract no customs duty, down from the previous 10%.

To rectify duty inversion, the import duty on Methylene Diphenyl Diisocyanate (MDI) is proposed to be reduced to 5% in the coming fiscal year from the current 7.5%. “To enhance the competitiveness of exports in the leather and textile sectors, I propose to reduce BCD on real down filling material from duck or goose,” said Finance Minister Nirmala Sitharaman. She also announced the addition of new items to the list of exempted goods for the manufacture of leather and textile garments, footwear, and other leather articles for export.

The Budget 2024-25 also contains provisions for duty removal on additional accessories for the manufacture of textile and leather garments, synthetic footwear, and other export-oriented leather products. Moreover, the duty on real down filling material from duck or goose is proposed to be reduced to 10% from the current 30%. The budget has also added new categories of technical textiles to its tariff list.

Industry experts believe these measures will significantly boost competitiveness. Sudhir Sekhri, Chairman of the Apparel Export Promotion Council, believes that expanding the range of trims and embellishments under the Import of Goods at Concessional Rate of Duty (IGCR) scheme will boost readymade garment exports. Rakesh Mehra, Chairman of the Confederation of Indian Textile Industry, noted that the industry requires these bold steps—including capacity building, modernization, and cost reduction—to overcome stagnation.