US Tariffs to Hit India’s Leather Industry; Revenue May Fall 10–12% in FY26, Says Crisil

New Delhi, October 23: As per CRISIL Ratings, India’s leather and allied products industry is expected to experience a significant decline in the current fiscal year. As per the report, the decline may range between 10-12%, because of the high 50% tariff imposed by the United States on the imports of Indian goods. The tariffs are expected to negatively affect leather exports from India, hurting the revenue of companies operating within the textile sector.

Despite Domestic Support Exports May See Slowdown

According to Crisil, the leather industry, which earned about ₹56,000 crore last year, gets around 70% of its revenue from exports. A big chunk of these exports go to the European Union (over 50%) and the US (around 22%). However, the 25% additional tariff has made Indian products more expensive compared to products from countries like Cambodia, Italy, Vietnam, and France, where the tariffs are lower (between 15% and 20%). Because of this higher tax, India is finding it harder to compete with exports from other countries.

Margins and Credit Profiles Under Pressure

Crisil expects that the profitability of leather companies will likely fall by 1.5% to 2.0% because of the difficulties they are facing with exports. This could make it harder for these companies financially. Crisil looked at 34 companies and found that the combination of the high export taxes (tariffs) and lower demand for leather goods globally will continue to put financial pressure on the sector for the rest of the current financial year (FY26).

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