Government slashes import duties, eases regulations to boost leather and footwear sector

The Indian government has introduced a strategic package of duty cuts and regulatory eases specifically designed to revitalize the leather and footwear sector. These measures aim to protect domestic manufacturers from the rising costs and supply chain instability caused by global geopolitical tensions, particularly in West Asia.

A major highlight of this announcement is the reduction of Basic Customs Duty (BCD) to zero on several essential raw materials. This move targets the building blocks of modern footwear production such as EVA and PVC, which are critical for making lightweight soles and synthetic uppers, Polyurethane (PU) that is used extensively for cushioning and durable finishes, and solid Bleached Sulphate (SBS) that is vital for high-quality packaging in the luxury leather goods segment.

By eliminating these duties, the government is directly lowering the "landed cost" of production. This allows Indian factories to compete more effectively with international brands on price and quality.

Beyond simple tax cuts, the government is addressing structural barriers. There is a strong proposal to suspend or entirely remove anti-dumping duties on PVC-based resins. Previously, these duties were intended to protect local resin producers, but they inadvertently raised costs for the footwear industry.

Additionally, the government is relaxing certain Quality Control Order (QCO) norms. While maintaining safety standards remains a priority, these relaxations provide manufacturers with more flexibility in sourcing components. This is especially helpful during times when traditional supply routes are blocked or delayed.

These policy changes have become imperative due to the triple threat of economic challenges currently suffocating the leather and footwear sector. For months, manufacturers have contended with surging freight costs as major shipping disruptions forced vessels onto longer, more expensive routes. This logistical nightmare made the simple act of importing essential materials a heavy financial burden. Compounding this issue is the extreme volatility in energy markets; fluctuating fuel and gas prices have spiked the operational overhead required to keep large-scale factories running, squeezing profit margins to their breaking point.

Underpinning these economic pressures is a layer of deep geopolitical instability. The ongoing crisis in West Asia has injected a sense of persistent uncertainty into global supply chains, making it difficult for businesses to plan for the future with any degree of confidence. In this context, the government’s proactive stance reflects a vital shift toward a more responsive and agile trade policy. By strategically cushioning the industry against these external shocks, the new interventions serve as a stabilizing force, ensuring that domestic leather and footwear production can remain both steady and profitable despite the turbulent global landscape.

For the local footwear industry, these changes offer a much-needed breathing room. Lower input costs mean that companies can reinvest their savings into technology upgrades or workforce expansion. As global brands look for alternative manufacturing hubs outside of China, these fiscal and regulatory reliefs position India as an increasingly attractive and stable destination for leather and footwear production.