Major Boost: India targets massive growth in leather sector following trade deal with EU

The signing of the landmark India-European Union Free Trade Agreement (FTA) marks a watershed moment for India’s industrial landscape, positioning the leather and footwear sector as a primary beneficiary of what is being billed as the "mother of all deals." By dismantling long-standing trade barriers, the agreement pivots the industry from a period of cautious growth toward an era of aggressive global expansion. The most transformative element of the pact is the immediate reduction of import duties from levels as high as 17% to a definitive zero. This fiscal liberation provides Indian exporters with an unprecedented competitive edge in the EU, a 27-nation bloc that already consumes 43% of India’s leather exports but holds a total import potential nearing $100 billion.

Industry leadership views the deal as a catalyst for exponential growth. Leather Sector Skill Council (LSSC) Chairman Sanjay Leekha noted that leather exports are likely to "multiply manifold over the next two years," creating vital employment opportunities and helping achieve an overarching $30 billion export target. R Selvam, Executive Director of the Council for Leather Exports (CLE), echoed this optimism during the announcement of the 39th India International Leather Fair (IILF) 2026, stating that the deal makes reaching the sector’s $14-billion export target "relatively easier" and potentially achievable well before the 2030 deadline. "Zero-duty access to the 27-nation bloc will be a game-changer for the industry," added M Abdul Wahab, Regional Chairman (South) of the CLE, emphasizing the sheer headroom available for Indian exporters who currently contribute only $2.4 billion to the EU's massive market.

The strategic alignment comes at a critical time as India navigates global trade shifts. While R Selvam noted that "US tariffs did not have a major impact" because only 20% of exports are directed there, he admitted they caused some "sluggishness among domestic contract manufacturers." However, since the FTA was sealed, he observed that "enquiries have picked up, and manufacturers are now moving ahead with project commissioning." This renewed vigor is essential as the industry aims for a total turnover of $50 billion by 2030. To meet this, Selvam warns that massive capacity expansion is required, as India will need an additional 4 billion pairs of footwear annually to meet a projected demand of 6 billion pairs by the end of the decade.

The ripple effects of the agreement extend far beyond leather. Sohil Kothari, Director of Fine Jewellery Manufacturing Limited, described the pact as "beneficial and advantageous," noting it provides the jewellery industry with "import duty exemptions and a competitive edge" amidst rising gold prices. Similarly, Ramakrishnan M, Managing Director at Primus Partners India, hailed the move as a "significant step" that could have a "multi-billion-dollar impact on food and agriculture trade." As India prepares to showcase its prowess at the IILF 2026—featuring over 425 domestic exhibitors and design collaborations with Italy and the U.S.—the India-EU FTA stands as the cornerstone of a new economic reality. It is a deal that, as Prime Minister Narendra Modi and EU leadership suggested, will strengthen a "rules-based world order" while cementing India's position as a global manufacturing powerhouse.

----