Mumbai — India’s leather industry is poised for substantial growth, targeting a turnover of $50 billion by 2030, driven by stronger export momentum and rising domestic consumption, according to a report released by CareEdge Ratings on Tuesday.
The report highlights that supportive policy measures in the Union Budget 2026–27, coupled with the conclusion of the European Union Free Trade Agreement (FTA) on January 27 and recent reductions in US import tariffs, have created a favorable operating environment for India’s leather sector.
Policy Support and Cost Efficiencies
The Union Budget’s emphasis on rationalising import duties, lowering input costs, and simplifying compliance procedures is expected to improve operational efficiency and cost structures across the industry. Additionally, the EU-FTA significantly enhances market access, strengthening India’s export competitiveness.
India’s leather industry, characterized by its labour-intensive structure and strong export orientation, primarily exports value-added finished goods such as footwear, leather accessories, and garments rather than raw hides. This reflects substantial domestic processing capabilities and higher value addition.
Enhanced Export Potential
With its export basket already dominated by finished products, the improved trade framework is expected to enable Indian manufacturers to scale exports, stabilise demand cycles, and deepen relationships with global buyers. The report suggests that these developments will not only improve cost efficiencies but also expand profitability margins over the medium to long term.
The elimination of EU import tariffs — previously as high as 17 percent — significantly enhances the price competitiveness of Indian leather and footwear products in the European market. According to CareEdge Ratings, this move supports India’s leather exports of approximately Rs 0.21 lakh crore ($2.4 billion) and positions Indian companies to capture a larger share of the EU’s leather and footwear import market, valued at nearly Rs 8.71 lakh crore ($100 billion).
India as the Primary Beneficiary
India stands out as the principal beneficiary of the revised tariff regime, with duties expected to decline sharply from about 17 percent to zero in FY26. This structural shift is projected to strengthen India’s relative value proposition and drive meaningful demand expansion, particularly from leading European fashion hubs in Italy, France, and Germany.
Overall, the confluence of fiscal reforms and trade liberalisation measures is expected to accelerate export growth, reinforce India’s global positioning, and push the leather sector closer to its ambitious 2030 turnover target, the report concluded.
With inputs from IANS