The Indian footwear industry has cause for optimism following a year filled with tariff challenges and tightening profit margins. The newly introduced Budget and the India-US trade agreement have brought significant changes that tackle many of the industry's issues.

India's leather and footwear exports to the US reached $ 531 million between January and November 2025, an increase from $ 476 million the previous year, reflecting a growth of approximately 11percent, as per OTEXA data. Nevertheless, with millions working in major manufacturing hubs and profit margins pressured, the sector had been pursuing policy alleviation.

The trade agreement between India and the US enhances the industry as US tariffs drop from 50percent to 18percent.

With a sigh of relief, Puran Dawar, Chairman of the Development Council for Footwear & Leather Industry (DCFLI), noted that when the initial 25percent reciprocal tariff was enacted, buyers received a 10percent discount.

During the subsequent 25percent punitive tariff, an additional 10percent discount was offered to purchasers. He mentioned that the industry was in poor condition. As tariffs are lowered, the losses faced by exporters will be greatly diminished.

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He mentioned that the Agra cluster exports almost Rs 5000 crore (US $ 554 million) in total footwear and leather sales. From this 20percent, approximately Rs. 1000 crore (US $ 110.82 million) is aimed at the US market.

“He remarked that the US is too large of a market to overlook,” noting that it remains the foremost market for Indian leather and footwear exports.

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Indian Leather Products Association (ILPA) president Mohamad Azhar mentioned that Indian exporters have faced significant tariff disadvantages for many years, stating, “The cut to 18percent fundamentally alters the competitive environment and positions India much more robustly alongside major global competitors,” he noted.

Aside from the tariff relief, various essential measures revealed in the Budget also bolstered industry confidence. These comprise permitting duty-free imports of materials for shoe uppers, extending export realization periods from six months to one year, and maintaining assistance under last year’s Focus Product Scheme.

The budget maintains customs duty exemptions on wet blue leather and eliminates the 20percent export duty on crust leather, steps anticipated to enhance export market access for small and medium-sized tanners.

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Sachin Joseph, executive vice-president for marketing and IT at Paragon Footwear, stated that the “Addition of duty-free import advantages for shoe uppers, along with extended export timelines, would greatly enhance supply-chain efficiency, minimize operational bottlenecks, and simplify compliance for manufacturers. These measures would allow exporters to better organize production cycles and react more effectively to worldwide demand."