Budget 2026: footwear and leather sector gets export boost

As Finance Minister Nirmala Sitharaman presented her ninth budget on 1st February, India’s leather and footwear industry got a much-needed boost. With this the sector’s narrative has shifted from one of survival under high US tariffs to one of strategic global expansion.

The industry had been weathering a difficult storm, with exports dipping to $3.3 billion between April and December 2025-26, largely due to a punitive 50 per cent tariff imposed by the United States. However, the 2026-27 Budget introduced a series of surgical interventions designed to turn the tide.

The government’s strategy focused heavily on the supply chain. By allowing duty-free imports for shoe uppers—both leather and synthetic—and doubling the export timeline from six months to one year, the policy aimed to give manufacturers the breathing room they desperately needed. Furthermore, the removal of the 20 per cent export duty on crust leather was a direct hand extended to small tanners looking to break into international markets.

Industry leaders were quick to highlight how these technical changes would translate into real-world growth. Noting the structural shift, Gunjan Shah, CEO of Bata India, stated, "The proposed customs duty simplifications, duty-free imports for shoe uppers, and extended export timelines will improve cost efficiency and strengthen India's position as a competitive manufacturing and export hub for footwear."

This sentiment of operational relief was echoed by Sachin Joseph, EVP of Marketing & IT at Paragon Footwear, who emphasized the logistical advantages. "The extension of duty-free import benefits to shoe uppers, along with longer export timelines, will significantly improve supply-chain efficiency, reduce operational bottlenecks, and ease compliance for manufacturers," Joseph explained. He added that these measures "will enable exporters to plan production cycles more effectively and respond better to global demand," especially as India positions itself as a "reliable manufacturing and sourcing hub."

The broader economic impact of the sector—which remains one of India’s most significant employers—was not lost on the experts. Shiraz Askari, President of Apollo Fashion International Limited, found the government’s focus validating. "What is encouraging is the clear recognition of leather and footwear as important export-oriented, employment-intensive sectors. These steps will enhance cost competitiveness and strengthen India's position as a reliable manufacturing partner," Askari said.

For the MSMEs that form the backbone of the industry, Anupam Bansal, Executive Director of Liberty Shoes, pointed out that the budget’s focus on industrial competitiveness is vital because "a resilient vendor and sourcing ecosystem is critical for consumer-facing industries."

The timing of these reforms is particularly crucial as global giants like Nike, Adidas, and Puma increasingly look toward Indian clusters, such as those in Tamil Nadu, to diversify away from China. Ramesh Juneja, Chairman of the Council for Leather Exports (CLE), summarized the mood of the industry with cautious optimism. "At a time when exporters are exploring alternative markets to stave off the negative impact caused by US tariffs, this budget will be a big boost for the leather sector," Juneja remarked, concluding that "both manufacturers and exporters will reap benefits."

With the ‘Focus Product Scheme’ continuing its push to create 22 lakh jobs and target exports of Rs 1.1 lakh crore, the 2026 Budget has effectively rewritten the sector's roadmap, moving it from a defensive posture to an offensive one on the global stage.