The Indian footwear sector has reason to smile after a year riddled with tariff pressures and straining operating margins. The recently presented Budget along with the India-US trade deal has made sweeping changes that address a lot of the industry’s problems.
India’s leather and footwear exports to the US stood at US $ 531 million during Jan–November 2025, up from US $ 476 million the year earlier, a growth of around 11%, according to data from OTEXA. However, with millions employed across key manufacturing clusters and operating margins under strain, the industry had been seeking policy relief.
The India-US trade deal provides a boost to the industry with US tariffs decreasing from 50% to 18%.
Expressing a sigh of relief, Puran Dawar, Chairman, Development Council for Footwear & Leather Industry (DCFLI), mentioned that when the first set of 25% reciprocal tariff was implemented, a discount of 10% was given to buyers. At the next punitive tariff of 25%, a further discount of 10% was given to buyers. The industry was in a bad state, he added. With the reduction in tariffs, the losses incurred by exporters will be significantly reduced.
He said the Agra cluster exports nearly Rs 5000 crore (US $ 554 million) in total footwear and leather exports. Out of this 20% i.e. around Rs. 1000 crore (US $ 110.82 million) is directed at the US market.
“The US is too big a market to ignore,” he opined adding that it still constitutes the single largest market for Indian footwear and leather exports.
Indian Leather Products Association (ILPA) president Mohamad Azhar said Indian exporters had been operating under a severe tariff disadvantage for years, adding, “The reduction to 18% fundamentally changes the competitive landscape and places India on a far stronger footing with major global players,” he said.
Beyond the tariff relief, several key measures announced in the Budget further lifted industry sentiment. These include allowing duty-free imports of inputs used in shoe uppers, extending export realisation timelines from six months to one year, and continuing support under last year’s Focus Product Scheme.
The budget also continues customs duty relief on wet blue leather and removes the 20% export duty on crust leather, measures expected to improve access to export markets for small and medium tanners.
Sachin Joseph, executive vice-president for marketing and IT at Paragon Footwear, said the “Extension of duty-free import benefits to shoe uppers, combined with longer export timelines, would significantly improve supply-chain efficiency, reduce operational bottlenecks, and ease compliance for manufacturers.” He added that these steps would enable exporters to plan production cycles more effectively and respond more efficiently to global demand.
Similarly, Anupam Bansal, executive director at Liberty Shoes, said “Emphasis on strengthening domestic production and improving the operating environment for businesses sends a positive signal for organised retail, which remains closely linked to the health of India’s manufacturing base.”
Global brands including Nike, Adidas, Puma, and New Balance have been expanding their manufacturing presence in India as part of broader China-plus-one strategies. Major manufacturers have already committed significant investments in footwear clusters in Tamil Nadu.
