The Union Budget 2025-26 has introduced significant changes in customs duties related to the leather industry, benefiting both importers and exporters.
These changes aim to strengthen India's leather manufacturing sector and improve global trade competitiveness.
| Previous vs. Current Duty Structure | ||
| Leather Type | Previous Duty | New Duty (Effective April 1, 2025) |
| Wet Blue Leather (Import) | 10% Basic Customs Duty (BCD) | 0% (Fully Exempt) |
| Crust Leather (Export) | 20% Export Duty | 0% (Duty Removed) |
Lower Raw Material Costs – Previously, importers had to pay a 10% Basic Customs Duty on Wet Blue leather, increasing procurement costs. Now, with full exemption, raw material costs will drop significantly.
Boost to Domestic Manufacturing – India’s leather manufacturers depend on high-quality raw materials for making finished products like shoes, bags, and accessories. Lower import costs will make raw materials more accessible and affordable, enhancing domestic production.
Increased Profit Margins – Importers can now source Wet Blue leather at a lower cost, allowing them to either pass on savings to manufacturers or increase their own profitability.
Cost Reduction in Exports – Previously, crust leather exports were subject to a 20% duty, making Indian products expensive in global markets. With the duty now removed, exporters can offer competitive pricing, boosting demand.
Enhanced Competitiveness – India’s leather industry faces strong competition from China, Vietnam, and Italy. The removal of export duty improves pricing, making Indian crust leather more attractive in international markets.
Opportunities for MSMEs – Many small and medium-sized tanners and exporters previously struggled with high export duties. With this policy change, they can now expand their business and explore new global markets.
These duty exemptions align with India’s broader economic strategy to:
#Budget2025 #LeatherIndustry #ImportExport #MakeInIndia #AatmanirbharBharat
