Budget renews revival hope for tariff-hit leather sector
Times of India | 2 February 2026
Kolkata: Manufacturers of leather goods in the city feel that the implementation of the measures announced in the Union Budget on Sunday will "renew hope" for the struggling units that are reeling under high raw material costs and falling exports. The measures are significant at a time when leather exporters are looking for ways to combat the negative impact of steep US tariffs.
While presenting the Budget, Union finance minister Nirmala Sitharaman proposed allowing duty-free imports of specified inputs, which is available for exports of leather or synthetic footwear, to exports of shoe uppers as well. She also proposed extending the time period for export of the final product from the existing six months to one year for exporters of leather or textile garments, leather or synthetic footwear, and other leather products.
In Bengal, the leather and leather goods industry has a market size of Rs 23,000 crore, with India's overall market standing at over Rs 45,000 crore. The state also witnessed the largest export of leather goods in India, clocking Rs 5,600 crore, about 30% of the total leather exports value from the country. As global brands are diversifying their sourcing, Bengal's leather sector is expected to grow by 10% in the coming fiscal.
"The IGCR scheme is already extended to exporters of leather garments, footwear and leather products. Now, including shoe uppers exporters is a major benefit which will help enhance export of this value-added product, which was to the tune of US$ 222 million in 2024-25," said Zia Nafis, director of Nafis and Tanning Industries.
Ramesh Juneja, chairman of Council for Leather Exports, said, "At a time when exporters are exploring alternative markets to stave off the negative impact caused by US tariffs, this budget will be a big boost for the leather sector. Both manufacturers and exporters will reap benefits."
Nari Kalwani, CMD of Asian Leather and Regional Chairman of Indo German Chamber of Commerce, termed the budget as a "big relief and new boost" that chalks out a map for overall growth of the leather industry, both in Bengal and in the country.
By extending export timelines and easing duty-free input norms for leather goods, the budget acknowledges the working-capital and supply-chain realities of the sector, said Yashovardhan Gupta, director of Metropoli Fashions Pvt Ltd.