CHENNAI: Leather and footwear exporters in Tamil Nadu, India’s largest production hub for the sector, have welcomed the US decision to cut tariffs on Indian imports from as high as 50% to 18%, even as last year’s steep levies have made them wary of over-reliance on the American market.
The earlier tariff spike sharply squeezed margins, forcing exporters in clusters such as Vellore, Ranipet, Ambur and Chennai to absorb losses of 20-25% to retain buyers. “US buyers demanded discounts of up to 20%, which exporters had to absorb,” said Israr Ahmed, director of Farida Prime Tannery and former vice-president of the Federation of Indian Export Organisations. “We were only trying to ensure customers didn’t shift elsewhere.”
The rollback, ahead of the winter ordering cycle, is expected to stabilise prices and revive volumes, particularly in leather footwear and finished leather, segments where Tamil Nadu dominates India’s exports. However, Ahmed said the episode underscored the need for diversification, with Europe emerging as a key focus alongside the US. The tariff relief, part of the India-US Bilateral Trade Agreement, is expected to improve competitiveness in value-added categories such as footwear, components and finished leather. Exporters also expect better factory utilisation and employment across MSMEs.
“Orders may return, but exporters won’t put all their eggs in one basket again,” Ahmed said. Industry leaders are now pinning hopes on the proposed India-EU free trade agreement. M Abdul Wahab, regional chairman (South), Council for Leather Exports (CLE), said the EU accounts for about 43% of India’s leather exports, valued at $2.4 billion, and zero tariffs could push this to $6 billion by 2030. Separately, CLE welcomed the extension of the IGCR scheme to shoe uppers exporters but flagged concerns over the sharp cut in RoDTEP allocation for 2026-27.