New Delhi: Finance Minister Nirmala Sitharaman announced targeted support for India’s footwear and leather industry in her ninth budget on Sunday—a sector hit hard by a 50% US tariff but now eyeing opportunities as global buyers shift away from China.
India’s leather and footwear exports stood at $3.3 billion during April-December 2025-26, holding steady despite the tariff hit. But with millions employed across manufacturing clusters and margins under pressure, the industry had been seeking relief.
The Budget 2026-27 delivers on multiple fronts: duty-free imports of inputs for shoe uppers, extended export timelines from six months to one year, and continued support for last year’s Focus Product Scheme.
According to Gunjan Shah, CEO of Bata India, “The proposed customs duty simplifications, duty-free imports for shoe uppers, and extended export timelines will improve cost efficiency and strengthen India’s position as a competitive manufacturing and export hub for footwear.”
What Changes on the Ground
The duty relief offers immediate help. By allowing duty-free imports of inputs for shoe uppers—the visible part above the sole—the government has widened support for exporters working with both leather and synthetic materials.
The extended timeline matters equally. Earlier, exporters had to ship products within six months of importing duty-free inputs. This has now been doubled to one year, giving manufacturers more breathing room to manage production and respond to changing global demand.
“The extension of duty-free import benefits to shoe uppers, along with longer export timelines, will significantly improve supply-chain efficiency, reduce operational bottlenecks, and ease compliance for manufacturers,” said Sachin Joseph, EVP – Marketing & IT at Paragon Footwear. “These measures will enable exporters to plan production cycles more effectively and respond better to global demand.”
The budget also continues customs duty relief on wet blue leather and removes the 20% export duty on crust leather—helping small tanners access export markets.
“The continued focus on MSMEs and industrial competitiveness is encouraging, as a resilient vendor and sourcing ecosystem is critical for consumer-facing industries,” said Anupam Bansal, Executive Director of Liberty Shoes.
Timing meets opportunity
These measures build on last year’s Focus Product Scheme, which aims to create 22 lakh jobs and push exports beyond Rs 1.1 lakh crore. The scheme supports design, component manufacturing, and machinery purchase for both leather and non-leather footwear.
The timing is crucial. Global brands like Nike, Adidas, Puma, and New Balance are expanding manufacturing in India as part of their China-exit strategies. Major manufacturers have committed significant investments in Tamil Nadu’s footwear clusters.
“What is encouraging is the clear recognition of leather and footwear as important export-oriented, employment-intensive sectors,” said Shiraz Askari, President of Apollo Fashion International Limited. “These steps will enhance cost competitiveness and strengthen India’s position as a reliable manufacturing partner.”
Beyond big exporters
The benefits will flow beyond large exporters. The MSME ecosystem of tanneries, component makers, and job workers will gain from better working capital and easier compliance.
“These reforms have a direct multiplier effect on job creation across clusters and workforce-intensive supply chains,” Askari added.
Joseph from Paragon Footwear added that at a time when India is positioning itself as a reliable manufacturing and sourcing hub, “such targeted policy support will go a long way in accelerating footwear exports and reinforcing India’s presence in international markets.”
While the budget doesn’t offer direct retail stimulus, its manufacturing push aligns with what the sector needs now. With global trade tensions rising, industry leaders see the government’s approach as practical rather than populist.
“This balanced direction reinforces long-term confidence in India as both a growing consumer market and a competitive manufacturing hub,” Bansal said.
