Bengal’s leather, textile and tea sectors in US tariff crosshairs
Times of India | 1 August 2025
Kolkata: The fate of several thousand workers in the leather industry in Kolkata hangs in balance after US President Donald Trump brandished the tariff sabre over Indian goods. While Bengal's textile and tea sectors will also take a hit, it is the small units in Topsia, Tiljala, and larger factories in Bantala that will be worst hit if Trump sticks to the 25% tariff on Indian goods, in addition to a penalty for buying Russian oil and arms. Now, Indian leather imported into the US is duty-free.
The leather goods industry in Kolkata employs 5 lakh workers, of which around 60% or 3 lakh are engaged in export-oriented goods. Though there is a large degree of insulation that the European market provides to the industry, there is a fear that if the tariffs do kick in, even the EU could drive a hard bargain. "The US as a country is currently the largest importer of leather goods from Kolkata. More than 20% of the goods — bags, wallets, belts, and industrial products like gloves and aprons — are shipped to the US from here. Germany is currently the second-largest importer, although the EU as a bloc imports nearly 60% of Kolkata's leather goods," said Council for Leather Exports vice-chairman (all India) and regional chairman Ramesh Juneja.
According to CLE, Bengal exports around Rs 7,000-crore leather and leather goods, of which the US accounts for nearly Rs 2,000 crore. While the US may continue to source industrial leather products from India, these products from Vietnam, Bangladesh, Indonesia, and Guatemala become more price competitive due to tariffs. "Luxury items will take a hit," said Bantala ILPA Leather Goods Park chairperson Tapan Nandy.
Asked where Indian leather industry has an advantage over China and Vietnam, Indian Leather Products' Association president Arjun Kulkarni said unlike the line production that they have where a product has to be manufactured in huge scale, the group system in Kolkata allows manufacture in smaller numbers. Tea exports to the US from Bengal, while a lot less than the UK and other major countries, are still 4 million kg valued in excess of Rs 200 crore. Luxmi Tea MD Rudra Chatterjee, who exports to the US, said the export to the US was mostly of speciality tea, black tea, and white tea. Among the competitors who trade tea with the US, only Kenya has a tariff advantage. China and Sri Lanka are currently in a higher tariff bracket. Chatterjee added that export of value-added tea packs from India would also be affected. However, according to Indian Tea Association's former top official S Patra, very few countries can offer the kind of tea that India does. Buyers in the US may still end up importing tea from India, notwithstanding the tariff, he said.
That may not be the case for garments. Sanjay Jain, MD of TT Ltd and chairman of the Indian Chamber of Commerce's National Textiles Committee, said, "The 25% tariff is still manageable as it is 35% on Bangladesh and 30% on China. But the tariffs on Vietnam and Indonesia stand at 20% and 19%, respectively. For us, the more worrisome thing is the penalty for trade with Russia.
"Vinod Kumar Gupta, MD of Dollar Industries, said, "The new US tariffs will significantly raise costs for Indian textile and apparel exporters. But, we still have the UK FTA and ‘China plus' in our favour. The EU is also looking at buying garments and textiles more from India.