US tariffs hit India’s $4.1 billion leather exports industry, with Kolkata emerging as the crisis epicentre

India’s leather exporters, particularly in Kolkata, are reeling after the US imposed a steep 25 per cent tariff on Indian leather imports, alongside duties linked to Russian oil purchases . The move, part of President Donald Trump’s aggressive trade strategy, is expected to erode India’s competitiveness in a $100-billion US market.

A $4.1 Billion Industry Under Threat

Government data shows India exported nearly $4.1 billion worth of leather and leather products between April 2024 and February 2025, with the US accounting for $870 million. Kolkata, which contributes nearly 50 per cent of India’s exports, is among the worst hit.

“With such high duties, we are in wait-and-watch mode. We cannot even offer discounts to buyers,” said Ramesh Juneja, vice chairman of the Council for Leather Exports.

Tariffs Push Costs to Breaking Point

Industry leaders warn that effective duties on Indian leather could touch 50 per cent when compounded with MFN tax and oil-linked tariffs.

“This will impact both price and cost at which American importers source Indian products. The ripple will extend into Europe too,” cautioned Arjun Mukund Kulkarni, president of the Indian Leather Products Association (ILPA).

Exporters Mull ‘Made in Europe’ Workarounds

Faced with shrinking margins, some exporters are exploring partial production in Europe to rebrand products under a “Made in Europe” tag. This could help bypass punitive US tariffs.

“The footwear category, which makes up 40 per cent of global leather products, will suffer most. A $100 pair of Indian shoes in US retail may now cost $150, while Vietnamese or Indonesian products attract only 19-20 per cent duty,” said Kanishk Maheshwari, co-founder of Primus Partners India.

Call for Government Action

Industry players argue urgent policy support is critical. “Brazil is subsidising its exporters. India too must come up with revolutionary measures to keep us afloat,” Kulkarni stressed.

Without intervention, experts warn, the labour-intensive leather sector, which employs millions across West Bengal, Agra, and Kanpur, may face widespread disruption.