‘Leather industry counting on robust domestic market to offset US tariff hit’

Kolkata: India’s leather and leather goods exporters are staring at a 7-8 per cent fall in shipments in the 2025-26 fiscal, owing to the impact of steep US tariffs, officials said on Friday.

The industry, however, has showed resilience, banking on a fast-growing domestic market to cushion the blow and stabilise the overall turnover, they said.

While exports are projected to decline, industry leaders are hopeful that robust growth in the domestic market will help offset losses, and could even lead to an overall gain in 2026-27, the Indian Leather Products Association (ILPA) said.

“In the current fiscal, export value may decline 7-8 per cent due to the impact of US tariffs,” ILPA president Arjun Kulkarni said, speaking at the curtain raiser event of its first B2B fair and fashion show. In the previous fiscal, total exports stood at USD 5.7 billion.

The current global environment – marked by the lingering effects of COVID-19, the Russia-Ukraine war, logistical disruptions through the Suez Canal, and new US tariff measures – has dampened export prospects, ILPA officials said.

“Export numbers will definitely fall, but the company turnover may not decline as much because of the captive domestic market,” ILPA chairman Akash Nayar said.

The strong domestic economy, supported by one of the world’s fastest growth rates and an expanding base of affluent consumers, has been driving local demand, he said.

“The Indian market is growing fast with many young billionaires, who have a taste for premium leather products,” ILPA vice-president Rajarshi Dey added.

Entrepreneurs also highlighted the industry’s resilience in the face of repeated crises.

“With every wave of COVID, we fell, but emerged even stronger. We are very resilient and have proved that we can sustain through all these,” Dey said.

The sector’s pivot toward the domestic market has been aided by policy support. The central government has signed free trade agreements with Australia, UK, UAE, and Japan, and negotiations are underway with the European Union.

At the state level, exporters have benefited from initiatives that provide platforms for local retail sales.

Despite cumulative US tariffs of up to 58 per cent, including reciprocal and penal tariffs, American importers continue to place strong orders with Kolkata-based exporters, according to industry representatives.