(MENAFN- KNN India) New Delhi, Oct 25 (KNN) India's leather and leather goods exports are likely to decline by 7–8 percent in value terms during the current financial year (FY26) due to the impact of steep US tariffs, according to the Indian Leather Products Association (ILPA).

Despite the setback, the industry remains optimistic that robust domestic demand and growing exports to alternative markets such as Australia, the UK, and the UAE will help offset losses from the US market.

“In the current financial year, export value may decline 7–8 percent due to the impact of US tariffs,” said ILPA President Arjun Kulkarni on Friday in Kolkata.“But this fall will be balanced by the increasing demand in the domestic market and other overseas destinations,” he added.

Kulkarni was addressing the media during the curtain-raiser event for ILPA's first B2B fair and fashion show. India's total leather and leather goods exports stood at USD 5.7 billion in the previous fiscal year.

According to ILPA, geopolitical tensions, logistics disruptions, and the new tariff measures by the United States have adversely affected export sentiment.

“Export numbers will definitely fall, but no company may witness a significant drop in turnover because of rising domestic demand,” said ILPA Chairman Akash Nayar.

Nayar noted that the Bantala Leather Complex in Kolkata currently employs around five lakh people.

He added that while US importers continue to place orders, they are demanding 20–25 percent discounts. However, the stronger US dollar against the Indian rupee is providing exporters with some cushion.

“Exporters are not incurring losses due to the exchange rate advantage, though margins have narrowed,” Nayar said.

The ILPA expects that the sector's diversification efforts and domestic consumption growth will help sustain overall industry performance despite near-term export headwinds.

(KNN Bureau)

MENAFN25102025000155011030ID1110246984