Leather and Footwear industry seeks duty waivers to combat surging input costs amid West Asia crisis

Rising input costs due to the West Asia crisis have prompted India’s leather and footwear industry to petition the government for urgent duty exemptions on critical raw materials and machinery. Industry representatives have formally approached the Commerce and Industry Ministry, warning that the geopolitical instability has driven the cost of essential inputs up by as much as 60 percent.

According to a senior industry official, the sector is seeking relief on a wide array of imports, including synthetic leather (PU-coated fabrics), metal accessories, threads, moulds, eyelets, and specialized chemicals. The crisis has particularly strained the supply of petroleum-derived components, such as adhesives, plastics, shoe soles, and rubber chemicals, as tensions surrounding the Strait of Hormuz disrupt global oil and gas shipments.

To counteract these headwinds, exporters are urging the early implementation of the proposed Footwear and Leather-Oriented Transformation (FLOAT) scheme. This comprehensive initiative is intended to modernize the entire value chain, covering everything from raw material procurement to advanced machinery. Additionally, the industry has called for the duty-free import of crust and finished leathers to bolster domestic manufacturing capabilities and maintain global competitiveness.

The logistical and economic fallout of the West Asia crisis comes at a delicate time for the sector. While the industry frequently sources inputs from China, Korea, Indonesia, and Japan, total imports for the sector declined by 4.49 percent year-on-year to $938 million.

On the export front, the figures present a mixed outlook. Exports of leather and leather products saw a 2.36 percent year-on-year decline, totaling $4.26 billion for the 2025-26 fiscal year. However, industry analysts remain cautiously optimistic; when accounting for non-leather goods, total sectoral exports are projected to reach approximately $5.6 billion. This follows a period of fluctuation where total exports, including footwear and leather garments, stood at $5.57 billion in 2024-25, compared to $5.38 billion the previous year and $6 billion in 2022-23.

By securing these fiscal concessions, industry leaders hope to stabilize production costs and reverse the recent downward trend in export volumes, ensuring the sector remains resilient amidst ongoing global supply chain disruptions.

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