Mumbai: The Indian leather sector is set for significant expansion, targeting a $50 billion turnover by 2030, supported by rising export momentum and increasing domestic consumption, according to a CareEdge Ratings report released on Tuesday.
CareEdge Ratings notes that India’s Union Budget 2026–27, along with the completion of the India–European Union (EU) Free Trade Agreement (FTA) as of January 27, and the recent cut in US import tariffs, collectively create a positive policy environment for India’s leather industry. The Budget’s focus on streamlining import duties, reducing input costs, and simplifying procedures is likely to boost cost efficiency and operational performance. Additionally, the EU–FTA significantly improves market access and export competitiveness.
India’s leather industry is a labour-intensive sector with a strong export orientation, the report said, adding that the industry’s export basket is dominated by finished products such as footwear, leather goods, and garments, rather than raw hides, indicating significant domestic processing and value addition.
Given the industry’s existing focus on finished footwear, leather goods, and garments, the improved trade environment strengthens its ability to scale exports, stabilise demand, and deepen engagement with global buyers, enabling the Indian leather industry to capture a larger market share in the medium to long term. Together, these developments are expected to generate cost efficiencies, thereby improving profitability margins, the report states.
Elimination of EU import tariffs currently as high as 17 per cent under the agreement substantially enhances the cost competitiveness of Indian leather and footwear products in the European market. CareEdge Ratings highlights that this will support India’s exports of around Rs 0.21 lakh crore ($2.4 billion) and help Indian companies gain a larger share of the EU’s leather and footwear market imports valued at approximately Rs 8.71 lakh crore ($100 billion).
India emerges as the principal gainer, with tariffs falling sharply from around 17 per cent to Zero in FY26, thereby enhancing its cost competitiveness and export potential. The removal of these duties under the new agreement is expected to improve India’s relative value proposition and drive a material expansion in demand, particularly from major European fashion houses in Italy, France and Germany, the report added.
(IANS)
