Indian leather exports fall amid US tariffs and West Asia crisis

India's leather and footwear exports decreased by 1.6% to $4.75 billion in the fiscal year ending 31 March 2026, as international trade conditions and geopolitical factors affected outbound shipments. The decline in dollar revenue was primarily driven by a pronounced slowdown in the second half of the financial year, triggered by escalating US tariffs and logistical disruptions arising from the crisis in West Asia. Exporters faced higher freight costs, increased insurance premiums, and shipment delays due to regional instability, which weakened India's export competitiveness in global markets.

The United States, a prominent market for Indian leather products, implemented a 50% reciprocal tariff during the year, which was later modified to a 10% ad valorem surcharge in February 2026. Performance across Europe, which accounts for approximately 55% of India's leather export market, was mixed. Traditional major destinations, including Germany, France, the UK, and Italy, recorded a contraction in shipments. Conversely, Spain and the Netherlands registered export growth during the same period.

Despite the decline in dollar value, India's leather sector showed a 2.62% increase when measured in domestic currency, reaching Rs. 41,902 crore. The divergence between currency metrics was supported by strong performances in specific sub-segments. Leather garments reported a 23% growth in rupee terms, while saddlery, harness, non-leather footwear, and footwear components also recorded expansion. These gains helped offset contractions in the exports of finished leather and generic leather goods.

To mitigate traditional market pressures, the sector expanded its trade footprint into emerging economies during the fiscal year, reporting increased shipments to the United Arab Emirates, Japan, and Australia. Industry representatives are anticipating potential relief in the current financial year through the projected finalisation of Free Trade Agreements (FTAs) with the European Union and the United Kingdom, which are expected to grant duty-free access to Indian leather products.