India’s leather and allied products industry faces one of its toughest years yet, with CRISIL Ratings projecting a 10- 12% fall in revenue for FY26. The slump follows the United States’ decision to impose a combined 50% tariff—25% reciprocal duty and 25% penalty for India’s Russian oil purchases.

The move has hit export demand sharply, with the agency warning that operating profitability could contract by 150-200 basis points and credit profiles weaken as a result.

Exports take a heavy hit

India’s leather industry, valued at ₹56,000 crore, earns nearly 70% of its revenue from exports, largely to the European Union (over 50%) and the US (around 22%). The fresh tariff burden, which came into effect in late August, has led to widespread order cancellations and production halts —p

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