US tariff cut offers relief to India’s leather, footwear exporters after months of strain

File photo

• US reduces tariffs on Indian goods to 18%, boosting leather and footwear exports
• Indian exports to US dropped 25% due to tariff hikes up to 50%.
• Ambur, Tamil Nadu, hit hard as 60 percent of its leather exports go to the US

Did our AI summary help?

The US decision to slash tariffs on Indian goods to 18% has offered a breather to India’s leather and footwear industry, which relies heavily on the American market for export growth. The move is expected to restore some pricing competitiveness and stabilise order flows.

Indian exporters had been grappling with tariff hikes of as much as 50%, forcing many to offer steep discounts of 10–40% to retain US buyers. Despite these concessions, exports to the US declined by around 25%, with orders increasingly shifting to competing manufacturing hubs such as Vietnam, Cambodia, Indonesia and the Philippines.

The stress has been particularly acute in Ambur, Tamil Nadu, a major leather manufacturing cluster, where several companies have close to 60% exposure to the US market. Exporters in the region say prolonged uncertainty over tariffs disrupted order visibility and raised concerns over capacity utilisation and employment.

The USA was the largest importer of leather and leather products from India and accounted for 21.56% of the country’s total leather exports in FY26 (April-June).

India accounts for nearly 13% of global leather production and is the world’s second-largest exporter of leather garments. It is also the fifth-largest exporter of leather goods and accessories. In the current financial year, leather exports to the US are estimated at $850–900 million, spanning footwear, finished leather, accessories and apparel. However, the recent tariff increases had pushed total duties on certain Indian leather products to as high as 40–50%, sharply eroding price competitiveness against rivals such as Vietnam, Cambodia and Italy.

India’s footwear exports have remained stable over the past nine financial years, averaging 25–26 crore pairs annually. Following a record high in FY2023, growth slowed to around 3% in FY2025, largely due to subdued consumer demand in key markets like the US and Europe amid economic uncertainty and inflationary pressures.

Concerns have also spilled over into India’s fast-growing non-leather footwear segment. Tamil Nadu, which has emerged as a key global manufacturing base and has attracted several thousand crore rupees of investment from brands such as Nike, Puma, Crocs and Adidas, had been unsettled by the prospect of sustained high US tariffs.