Indian leather exporters continue to report losses and falling shipments to their biggest overseas market following steep tariffs of up to 50% imposed by the U.S. Trump administration.
September 2025 marked the first full month of the tariff impact after duties came into effect on August 27, 2025, hitting trade volumes and forcing exporters to slash prices by 10-40% in an attempt to retain buyers.
Shipments from Bantala near Kolkata, one of Asia’s largest leather hubs, have already declined by 25%, while manufacturers in Ambur, Tamil Nadu, where several companies depend on the U.S. for around 60% of their business, are facing rising uncertainty and preparing for temporary layoffs. Many U.S. buyers are shifting sourcing to Vietnam, Cambodia, Indonesia, China and the Philippines.
The setback came after strong growth in 2024, when exports of Indian leather and leather products to the U.S. rose 16.58% year-on-year to US$1,045.27 million. The U.S. accounted for 21.65% of India’s total leather exports in FY25, up from 19.13% in FY24. India contributes about 13% of global leather production, is the world’s second-largest exporter of leather garments and fifth-largest exporter of leather goods and accessories.
Exporters say orders are dropping sharply. Rana Rajarshi Dey, Founder and Managing Director, Edcons Exports Private Ltd, said: “We are facing massive trouble in the U.S. market. For the Christmas orders, which we delivered in October and November, our American clients sought 15-20% discounts.”
Ramesh Juneja, Council for Leather Exports Vice Chairman, told The Hindu Business Line: “Due to the U.S. tariff, around 25% of their turnover has gone down. It has impacted the Bantala leather complex very badly. It has also impacted the companies’ growth rates. Every year these companies used to register 5-7% growth. Some of the units are making huge losses.”
Meanwhile, Sanjay Lulla, Managing Director of Chennai-based SM Lulla Industries Worldwide, which exports high fashion leather garments to Europe and the US, said: “We have no choice but to share the tariff with the U.S. clients. If not, they say, they would move to other markets for their sourcing.”
Industry representatives in Chennai estimate a 5-7% fall in exports to the U.S., with discounts cushioning deeper losses for now, according to Absul Wahab, Regional Chairman of the Council for Leather Exports. He said: “In order to retain the business and since the brands have long-term relationships, companies are currently offering discounts. The range of discounts is anywhere between 5-10%, depending on the brands. Due to this, the loss for the exporters at the end of FY26 would be around 5% because there is some currency gain also”.
Exporters are now shifting focus to Europe, West Asia, Japan, Australia and New Zealand to offset the decline, but uncertainty remains high as India’s leather sector braces for prolonged disruption to its most critical market.
Source: The Hindu Business Line
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