In April 2025, the Council for Leather Exports announced that India's leather, non-leather footwear, and leather goods exports had grown 25% year-on-year to USD 5.7 billion in FY 2024-25 — exceeding the Department of Commerce's export target by USD 1 billion. The CLE Director R. Selvam publicly projected that exports would cross USD 6.5 billion in FY 2025-26. This is not incremental progress. A 25% single-year jump, in a sector that has historically grown at 8–10% annually, is a structural acceleration — and it is happening precisely when first-time MSME entrepreneurs can enter the leather goods manufacturing and leather accessories business at the most supported point in the industry's history.

Then, in the Union Budget 2026-27, the government introduced additional measures under

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In April 2025, the Council for Leather Exports announced that India's leather, non-leather footwear, and leather goods exports had grown 25% year-on-year to USD 5.7 billion in FY 2024-25 — exceeding the Department of Commerce's export target by USD 1 billion. The CLE Director R. Selvam publicly projected that exports would cross USD 6.5 billion in FY 2025-26. This is not incremental progress. A 25% single-year jump, in a sector that has historically grown at 8–10% annually, is a structural acceleration — and it is happening precisely when first-time MSME entrepreneurs can enter the leather goods manufacturing and leather accessories business at the most supported point in the industry's history.

Then, in the Union Budget 2026-27, the government introduced additional measures under the IGCR (Import of Goods at Concessional Rate of Duty) Scheme specifically for the footwear and leather sector — extending the scheme to shoe upper exporters and extending the export obligation period from six months to one year. This Budget signal confirms that the government views leather and footwear as a priority export sector, not a legacy industry.

India leather and footwear exports, FY 2024-25: USD 5.7 billion — 25% growth year-on-year (Council for Leather Exports, April 2025)

FY 2025-26 export projection: USD 6.5 billion+ (CLE)

India: world's second-largest leather goods producer; second-largest global exporter of leather garments

Top export segment, FY 2024-25: Leather goods and accessories — 31% of total leather sector exports (CLE data)

Key manufacturing clusters: Chennai/Ambur (Tamil Nadu), Agra/Kanpur (UP), Kolkata (WB), Dharavi/Bhiwandi (Maharashtra)

Key licence required: Pollution Control Board NOC (tanneries); APEDA registration (export); BIS certification (IS 1638 for finished leather)

Five Reasons India's Leather Industry Is a Manufacturing Business Worth Starting Today

India's leather manufacturing business sits at the intersection of five structural advantages that are difficult to replicate elsewhere in the world. Understanding each helps a first-time entrepreneur decide where exactly in the value chain to position.

First, raw material access. India holds the world's largest cattle population — over 300 million bovines (DAHD, 20th Livestock Census). Every bovine hide in India is a raw material input for leather tanning and finished leather production. This gives Indian tanners a structural cost advantage over competitors in countries that must import raw hides. A tannery located near an abattoir in Tamil Nadu, West Bengal, or Uttar Pradesh has a supply chain advantage that Chinese or Vietnamese competitors cannot match on input cost.

Second, the global sourcing shift. China — historically the world's dominant leather goods exporter — is losing competitiveness as wages rise and global buyers diversify away from single-country concentration. This China-plus-one sourcing strategy is actively channelling orders to India. The CLE has confirmed that both US and UK buyers maintained order volumes and "the situation returned to normal by mid-April" after the US tariff adjustments of 2025. Indian exporters offered modest discounts to retain buyers during the tariff transition — no order cancellations occurred. This resilience demonstrates the depth of buyer commitment to India as a sourcing destination.

Third, a massive domestic market. India's 1.4 billion population, rising middle class, and a QSR and fashion retail boom are driving domestic demand for footwear, leather bags, wallets, belts, and accessories. India exports 250 million pairs of footwear annually (World Footwear 2024 Yearbook) while the domestic market absorbs several times that number. An MSME leather goods manufacturer who builds a domestic retail or e-commerce supply channel has a parallel demand stream that reduces export dependency.

Fourth, government-accelerating policy. The IFLDP (Indian Footwear and Leather Development Programme) 2021-26 is the current flagship scheme, covering infrastructure, technology upgradation, and employment in the leather and footwear industry. The Union Budget 2026-27 IGCR extension for shoe upper exporters targets a segment that generated Rs. 1,877.24 crore in exports in 2024-25 — a significant incentive for MSME leather goods exporters to certify for export. The Focus Product Scheme for footwear and leather improves design capacity and manufacturing capabilities. India-EU FTA discussions are expected to cut EU tariffs from approximately 17% to zero on Indian leather products — a transformative tariff reduction if finalised.

Fifth, the leather accessories opportunity. Leather goods and accessories — including handbags, wallets, card holders, belts, travel accessories, and saddlery — now account for 31% of India's total leather sector exports (CLE, FY 2024-25), making them the single largest export category. This segment is design-intensive, margin-rich, and more accessible to MSME entry than finished footwear (which requires volume and last-making infrastructure). An MSME leather accessories unit producing 500–2,000 pieces per day of wallets, bags, or belts for export has far lower capital requirements than a footwear factory while earning comparable per-piece margins.

SURPRISING STAT: Leather goods and accessories — including bags, wallets, belts, and travel goods — now account for 31% of India's total leather sector exports, making them the single largest export sub-category. Yet this segment is largely served by MSME-scale units, not large manufacturers. It is the most accessible entry point in India's leather value chain for a first-time entrepreneur, with per-unit margins of 35-50% on finished products sold to export buyers. (Source: Council for Leather Exports / CLE Overview, 2025)

India's Leather and Footwear Market: Demand Data, End-Users, and Export Breakdown

India is among the world's top four producers of finished leather, competing with Italy, China, and Brazil. The country produces an estimated 3 billion square feet of leather annually (industry estimate). Footwear exports, while not the largest category by value in FY25, remain a high-volume segment — India exports approximately 250 million pairs annually, with the US and EU as primary destinations. The leather garments segment — where India is the second-largest global exporter — accounts for 7% of total leather sector exports.

Domestically, India's per-capita footwear consumption has been rising steadily. The growing middle class, urbanisation, and the proliferation of branded footwear retail (Bata, Metro, Campus, Relaxo, Liberty) are driving domestic demand that MSME manufacturers serving these retail chains can tap. A finished leather supplier or shoe component manufacturer who becomes a preferred vendor to one of these brands has a stable, recurring domestic revenue stream alongside or instead of export sales.

India Leather and Footwear Sector — Export Trend and Growth Outlook

Year	India Leather & Footwear Exports (USD Bn)	Key Development
2019-20	~4.5	Pre-COVID baseline; China-plus-one sourcing begins
2020-21	~3.8	COVID disruption; domestic market recovery
2021-22	~4.7	Post-COVID surge; export target exceeded
2022-23	~4.9	IFLDP 2021-26 in implementation; cluster development
2023-24	~4.6	Stabilisation; US tariff uncertainty
2024-25	5.7	Record 25% growth; USD 1 bn above target (CLE)
2025-26 (proj.)	6.5+	CLE target; IGCR scheme extended; India-EU FTA progress
2028 (proj.)	~8.5	India-EU FTA potential zero tariff; brand development
2035 (proj.)	~14+	Full value-add maturity; sustainable leather premium

Note: Export figures from Council for Leather Exports (CLE), IBEF. Projections from 2028 onward are assumption-based at 8-10% CAGR.

 India exceeded its leather and footwear export target by USD 1 billion in FY 2024-25 — a gap that signals the government's own forecasts are being revised upward. The CLE's FY 2025-26 projection of USD 6.5 billion reflects industry confidence that the 25% growth trajectory is not a one-year anomaly. For a new MSME entering the leather goods or shoe upper manufacturing segment today, this is the demand signal to act on. (Source: CLE / Economic Times, April 2025)

What CLE and Government Data Reveal About India's Leather Sector Right Now

The Council for Leather Exports (CLE) — the statutory body under the Ministry of Commerce that promotes India's leather sector exports — publishes the most authoritative export and sector data. CLE's June 2025 overview document reveals that India's top 15 export destinations account for approximately 77.57% of total leather and leather products exports in FY 2025-26 (April-March), with a value of USD 4,750.11 million.

By sub-sector, leather goods and accessories dominate at 31% of exports; leather footwear accounts for the next largest share; leather garments contribute 7%. This product-category breakdown is significant for MSME planning: it shows that the highest-volume, highest-margin export category (accessories) is also the one most accessible to small manufacturers, because it does not require the high-precision lasting and assembly lines that formal footwear needs.

On the domestic policy front, the Union Budget 2026-27 introduced the IGCR scheme extension specifically for shoe upper exporters — a Rs. 1,877.24 crore export segment — and extended the export obligation period to one year. This is a direct fiscal incentive for MSME leather footwear component manufacturers who can now import duty-free inputs (leather, hardware, lasts) and have a full year to fulfil export obligations without penalty.

Government & Department Data: Leather and Footwear Sector

Statistic	Figure	Source & Year
India leather & footwear exports, FY 2024-25	USD 5.7 billion (25% YoY growth)	CLE, April 2025
FY 2025-26 export projection	USD 6.5 billion+	CLE, 2025
Leather goods & accessories share	31% of total leather exports	CLE Overview 2025
Leather garments share	7% of total leather exports	CLE Overview 2025
India: shoe upper exports, 2024-25	Rs. 1,877.24 crore (USD 222 million)	IBEF / Union Budget 2026-27
Top 15 countries' share of leather exports, FY26	~77.57% (USD 4,750 Mn)	IBEF / CLE, 2025-26
India footwear export volume (annual)	~250 million pairs	World Footwear 2024 Yearbook
India's position globally	Second-largest leather garment exporter	CLE, 2024

Sources: Council for Leather Exports / leatherindia.org (CLE Overview June 2025), IBEF (ibef.org), Union Budget 2026-27 documents, World Footwear Yearbook 2024

Government Schemes and Financial Support for Leather Manufacturers

IFLDP — Indian Footwear and Leather Development Programme 2021-26: The central government's flagship leather sector scheme, covering four components: infrastructure development in clusters; upgradation of leather and footwear manufacturing units; skill development under Leather Sector Skill Council (LSSC); and design and technology development through FDDI (Footwear Design and Development Institute). All leather and footwear MSMEs can access IFLDP support for technology and infrastructure.

IGCR Scheme Extension (Union Budget 2026-27): Shoe upper exporters can now import specified inputs at concessional customs duty and have 12 months (extended from 6) to fulfil export obligations. The scheme is now available to March 31, 2028. For MSME shoe upper manufacturers, this reduces import cost of premium leather and hardware components, improving export competitiveness.

CLCSS — Credit Linked Capital Subsidy Scheme: 15% capital subsidy (max Rs. 15 lakh) for technology upgradation investments in MSME leather tanning, footwear manufacturing, and leather goods units. Accessible through SIDBI and nationalised banks. Particularly useful for small tanneries upgrading to chrome-free or vegetable tanning technology.

CGTMSE: Collateral-free credit up to Rs. 2 crore for MSME leather goods and footwear manufacturers. First-generation leather goods entrepreneurs without property collateral can access working capital and term loans through CGTMSE-backed bank lending.

PMVBRY — Pradhan Mantri Viksit Bharat Rozgar Yojana (Leather Sector): CLE conducted awareness and outreach campaigns in November 2025 for leather and footwear MSME units under this scheme. PMVBRY supports new employment creation with government contribution to EPFO for new hires, reducing the payroll cost burden for expanding leather goods units.

State-Level Industrial Policies: Tamil Nadu (Chennai-Ambur cluster), Uttar Pradesh (Agra-Kanpur cluster), and West Bengal (Kolkata cluster) all have dedicated leather industry development schemes. Tamil Nadu's leather cluster scheme provides land at subsidised rates, common effluent treatment plant (CETP) access, and skills training through ITIs. For tanneries especially, co-location near a CETP is essential for environmental compliance.

Import-Substitution and Export Gaps in India's Leather Value Chain

India's leather export destinations are well-diversified. The US accounted for approximately 22% of India's leather exports in FY 2024-25 — the single largest buyer despite tariff headwinds. The UK, Germany, France, Italy, Belgium, UAE, and Poland are other consistent large buyers. This geographic diversification reduces single-market concentration risk that would otherwise make the sector volatile.

The India-EU FTA, if concluded, is the single most transformative potential trade event for India's leather and footwear export sector. EU tariffs on Indian leather products currently stand at approximately 17%, compared to zero for competing exports from Vietnam (under EU-Vietnam FTA) and near-zero for Chinese products under historical arrangements. An India-EU FTA bringing tariffs to zero would make Indian leather goods — especially footwear and accessories — price-competitive against the two dominant suppliers to the EU market for the first time. CLE has already identified this as a priority trade negotiation and has submitted industry input on priority product categories.

On import substitution: India still imports significant volumes of specialty finished leather — particularly patent leather, suede, and high-grade calf leather — from Italy, Germany, and Spain. Indian tanneries that develop premium finishing capability can address this import gap and supply domestic luxury footwear and accessories brands who currently import finished leather at significant cost.

Leading Indian Manufacturers in Leather, Footwear, and Leather Goods

Company	Note
Tata International Ltd.	Largest Indian leather goods exporter; footwear, gloves, garments; pan-India presence
Florind Shoes Ltd.	Tamil Nadu-based; premium leather footwear; export-oriented; APEDA-registered
Mirza International Ltd.	Listed; Kanpur-Agra cluster; finished leather and footwear; large export volume
Farida Group (Farida Shoes)	Tamil Nadu; large-scale footwear manufacturing; global brands sourcing
Bata India Ltd.	Listed; pan-India retail; domestic market leader; sourcing from Indian MSME vendors
Liberty Shoes Ltd.	Listed; Haryana-based; domestic and export footwear; MSME-friendly vendor network
Superhouse Group	Agra-based; leather and leather goods; footwear; significant export focus
Relaxo Footwears Ltd.	Listed; non-leather and leather combination; mass market domestic

The Leather and Footwear Sector Through 2035: Where the Growth Is Going

India's leather manufacturing sector has two distinct growth trajectories through 2035. The first is volume-driven: rising Indian domestic consumption of footwear, accessories, and leather goods from 1.4 billion consumers increasing their per-capita spend. As organised retail expands into Tier-II and Tier-III cities, the demand for standardised, quality leather goods sold through modern retail channels grows proportionally. MSME leather goods manufacturers who can supply retail chain requirements — consistent sizing, barcoding, quality standards — access this growth without needing export capability.

The second trajectory is export value-driven: the global shift toward sustainable and traceable leather, driven by EU and US consumer expectations and regulatory standards. Chrome-free, vegetable-tanned leather and certified sustainable leather products command 20–40% price premiums. Indian tanneries that invest in cleaner tanning technology now — supported by CLCSS and CETP infrastructure — will be positioned to serve the premium global market that MSME tanners currently cannot access due to certification barriers.

At the CLE's projected 8–10% CAGR trajectory, India's leather and footwear exports reach USD 14 billion by 2035. The India-EU FTA, if concluded by 2027-28, would materially accelerate this timeline. For a leather accessories manufacturer or footwear component supplier entering the sector today, the 10-year demand trajectory is unambiguously upward — with government scheme support reducing entry capital requirements and trade agreements progressively opening new export markets.

Practitioner Insight: The biggest compliance trap for new leather tanneries in India is Pollution Control Board (PCB) consent management. Tanning is classified as a Red Category industry under India's environmental regulations, requiring Consent to Establish and Consent to Operate from the State PCB before a single hide can be processed. First-time tannery entrepreneurs routinely underestimate the time (6-18 months) and cost (Rs. 15-40 lakh in CETP connectivity and ETP investment) required for PCB compliance. The practical solution is to locate your tannery within an existing recognised leather cluster that shares a CETP — Chennai, Ambur, Kanpur, and Kolkata all have such clusters. Co-location eliminates individual ETP capital cost and resolves PCB consent significantly faster than standalone greenfield sites.

Practitioner Q&A: What MSME Founders Ask Before Entering Leather Manufacturing

Q1. Which segment of leather manufacturing is most accessible for a first-time MSME entrepreneur? Leather accessories and small goods — wallets, card holders, belts, key fobs, and small handbags — are the most accessible entry point. They require relatively modest capital investment (Rs. 10-30 lakh for cutting, stitching, and finishing equipment), can be operated from a workshop of 500-1,000 sq ft, and have strong export demand. Unlike footwear, they do not require last-making infrastructure or complex upper-cutting dies. A well-designed wallet or card holder made with quality finished leather can command Rs. 300-1,500 per piece at export prices.

Q2. What is the difference between a tannery and a leather goods manufacturing unit in terms of licences? A tannery processes raw hides into finished leather — it is a Red Category industry requiring PCB Consent to Establish and Consent to Operate, effluent treatment facilities (or CETP access), and factory registration under the Factories Act. A leather goods manufacturing unit (bags, wallets, belts) uses already-finished leather as its raw material input — it is a lower-pollution activity, classified Green or Orange Category, requiring FSSAI if food-contact applications apply, and standard MSME registration. The regulatory burden is substantially lower for leather goods manufacturing than for tanning.

Q3. How does the India-EU FTA affect an MSME leather goods exporter's planning? If concluded (discussions ongoing as of 2026), the India-EU FTA would reduce EU tariffs on Indian leather products from approximately 17% to zero. This would make Indian leather bags, wallets, and accessories directly price-competitive with Vietnamese and Chinese products in Germany, France, Italy, and the Netherlands — currently the largest EU leather goods markets. An MSME exporter who builds EU buyer relationships before the FTA is finalised will be positioned for an immediate price-competitiveness improvement when tariffs fall.

Q4. What quality certifications do EU buyers require from Indian leather goods manufacturers? EU buyers typically require ISO 9001 (quality management), REACH compliance (no restricted substances in leather and dyes), and increasingly the Leather Working Group (LWG) Environmental Audit Protocol certification for tanneries. For finished goods, EU-specific chemical substance restrictions under REACH apply to azo dyes, chromium VI content, and certain finishes. Working with LWG-certified tanneries for your leather input supply is the most practical way to meet EU buyer chemical compliance requirements without setting up independent testing infrastructure.

Q5. Is vegetable-tanned leather a realistic product for a new MSME tannery? Vegetable tanning — using plant-based tannins (wattle, quebracho, myrobalan) instead of chromium sulphate — is growing in buyer preference for premium leather products. It commands 30-50% price premiums over chrome-tanned leather for equivalent finished quality. However, it requires longer processing times (30-60 days vs 1-3 days for chrome tanning) and higher skill levels. For a new tannery, the recommended approach is to pilot vegetable tanning for one specific product line (e.g. vegetable-tanned calf leather for a premium accessories buyer) while maintaining chrome tanning for volume production.

Q6. Can a leather accessories MSME sell directly on e-commerce platforms without an export agent? Yes — Indian leather accessories MSMEs are increasingly selling directly on Amazon Global, Etsy, and their own Shopify storefronts. D2C e-commerce exports do not require CLE registration for below-threshold shipments, and APEDA registration is only required for certain agricultural and food products (not leather). The RoDTEP scheme applies to e-commerce exports, and LUT (Letter of Undertaking) with GST authorities allows zero-rated exports without upfront GST payment on export orders.

Q7. What is the typical buyer profile for Indian leather accessories in the export market? Three distinct buyer profiles exist: (1) European and US retail importers who source large volumes for their own private-label products — they specify design, material, and finishing requirements and place 3-6 month advance orders; (2) wholesale distributors who supply multi-brand accessories stores — they want standard designs, fast sampling, and FOB pricing; (3) corporate gifting buyers who order custom-printed and branded leather goods (card holders, diaries, keyholders) for annual employee or client gifting. Corporate gifting is typically domestic but growing in export markets too.

Q8. What is the minimum order quantity an MSME leather goods unit should accept for export? MOQ depends on product complexity. For standard wallets and card holders, 500-1,000 pieces per design is a realistic first order from a European importer. For custom-designed products (embossed logo, unusual closure), buyers expect 1,000-2,500 pieces minimum. Starting with 3-5 repeat buyers rather than 20 one-time buyers is the recommended approach — relationship depth and on-time delivery track record are what generate repeat annual contracts.

Q9. How important is FDDI (Footwear Design and Development Institute) for a leather goods entrepreneur? FDDI offers design development, material testing, and training programmes for leather goods entrepreneurs. Its design courses — offered in Noida, Chennai, Agra, and other centres — are particularly valuable for MSME founders who have manufacturing experience but limited product design capability. FDDI also operates a testing lab where leather goods units can test their products for REACH compliance, tensile strength, and colour fastness before submitting to international buyers' quality audits.

Q10. What does the CLE's USD 6.5 billion export target for FY 2025-26 mean for new MSME entrants? It means the organised buyer pipeline for Indian leather products is expanding faster than current Indian manufacturing capacity can fill. CLE's projection — made in April 2025 with confidence from a record USD 5.7 billion FY25 result — implies that buyers in the US and EU are increasing their order volumes from India. For a new MSME that achieves quality certification and builds initial buyer relationships in 2025-26, the market conditions are the most favourable in a decade. The entry window is open; the demand validation is government-backed data, not a forecast.

The Bottom Line

India's leather, footwear, and leather goods manufacturing sector has produced its best export result in history in FY 2024-25 — USD 5.7 billion, growing 25% year-on-year, exceeding the government's own target by USD 1 billion. The Council for Leather Exports projects USD 6.5 billion in FY 2025-26. This is the context in which a new MSME entrepreneur is entering the leather tanning, finished leather, footwear, or leather accessories business today.

The most important first step is segment selection. If you have access to a leather cluster with CETP (Chennai, Ambur, Kanpur, Kolkata), tanning is viable with CLCSS subsidy support and cluster infrastructure reducing your compliance cost. If you are starting without cluster access, leather goods and accessories manufacturing — wallets, belts, bags — is the cleaner, faster, lower-capital entry point that delivers the highest margins in the sector. Apply for CGTMSE-backed bank credit to finance machinery; register with FDDI for design capability development; and identify three EU or US buyers from the CLE's buyer-seller event calendar as your initial export targets. The demand is there. The government support is in place. The timing is aligned.

References

1. Council for Leather Exports (CLE) — India Leather and Footwear Export Data FY 2024-25: USD 5.7 billion, 25% YoY growth; FY26 projection USD 6.5 billion; product-wise breakdown (leatherindia.org, April 2025).

2. IBEF (India Brand Equity Foundation) — Indian Leather Industry: Top 15 countries USD 4,750 Mn in FY26; shoe upper exports Rs. 1,877 crore; IGCR scheme extension; India second-largest leather garment exporter (ibef.org, 2025).

3. Union Budget 2026-27 (Ministry of Finance) — IGCR Scheme extension for shoe upper exporters; export obligation period extended to 12 months; scheme validity extended to March 31, 2028.

4. Ministry of Commerce / PIB — IFLDP (Indian Footwear and Leather Development Programme 2021-26): infrastructure, technology upgradation, skill development, and design components for leather and footwear MSMEs (pib.gov.in / commerce.gov.in, 2021-26).

5. DD News / Economic Times — CLE Director and Chairman statements on FY 2024-25 export performance, tariff management, India-US trade discussions, and zero-for-zero duty proposal (ddnews.gov.in / economictimes.indiatimes.com, April 2025).

6. CLE / Leather India (leatherindia.org) — Overview of Indian Leather Industry 2025: product-wise export share; top destination countries; India second-largest leather garment exporter; PMVBRY outreach November 2025 (leatherindia.org, June 2025).