West Asia Crisis Hits Leather and Footwear Sector, Companies Seek Duty Relief Amid Soaring Input Costs

India's Leather and Footwear Industry Seeks Relief Amid Rising Costs

The leather and footwear industry in India has requested import duty exemptions on critical inputs, citing a sharp increase in raw material and input costs due to the ongoing West Asia crisis. Industry representatives have urged the commerce and industry ministry to provide immediate relief measures to cushion the impact on exporters and domestic manufacturers.

The industry is facing a significant rise in raw material and input costs, with prices increasing by 40-60 per cent. This is largely attributed to the West Asia crisis, which has disrupted the movement of oil and gas shipments, particularly around the Strait of Hormuz. The crisis has led to a shortage of petroleum products, causing costs to soar.

The industry has identified several key inputs that are in high demand, including synthetic leather, footwear components, metal accessories, machinery, threads, moulds, and certain chemicals. Exporters have also sought duty-free import of crust and finished leather to support domestic manufacturing and maintain export competitiveness.

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A significant portion of inputs used in the sector, including rubber chemicals, PU leather, adhesives, plastics, and shoe soles, are derived from petroleum products. The crisis in West Asia has pushed up input costs, which are further exacerbated by global supply chain disruptions. Several key inputs are also imported from countries such as China, South Korea, Indonesia, and Japan.

The rising costs have begun to reflect in trade data. Imports in the sector declined 4.49 per cent year-on-year to USD 938 million. Exports of leather and leather products also dipped 2.36 per cent to USD 4.26 billion in 2025-26. However, industry estimates suggest that total exports, including non-leather goods, could reach around USD 5.6 billion.

The industry has warned that without timely government intervention, sustained cost pressures could impact production, employment, and India's competitiveness in global markets.

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