US Tariffs To Cut Indian Leather Revenue By Up To 12%: Crisil

Indian leather and allied product firms will likely note a revenue decline by 10-12% this fiscal after the steep 50% tariffs were imposed by US on India, as per a Crisil Ratings report. Notably, US is a major market for domestic leather players.

The agency believes that with the high export concentration, companies would witness a decline despite a moderate improvement in domestic demand following the rationalisation of Goods and Services Tax (GST), besides other favourable macro-economic factors such as lower income taxes, benign inflation, and low interest rates, PTI said citing the report.

“The leather and allied products industry in India will see revenue decline 10-12 per cent on-year this fiscal as the 50 per cent tariff (25 per cent reciprocal tariff plus 25 per cent penalty for purchase of Russian oil) imposed by the United States will slash export volume,” Crisil said as per PTI

The leather and allied products industry is estimated to have generated around Rs 56,000 crore in revenue during fiscal 2025, with exports contributing nearly 70% of the total, according to Crisil Ratings.

A significant portion of these exports went to the European Union (over 50%) and the United States (around 22%). Signs of a slowdown in US demand have already emerged, following the implementation of a 25% reciprocal tariff in early August, as per the PTI report

The additional 25% tariff, effective August 27, 2025 as penalty due to Russian Oil imports, has placed India at a further disadvantage vis-à-vis other major exporting nations such as Cambodia, Italy, Vietnam and France, where the US tariffs are lower at 15-20%. Jayashree Nandakumar, Director at Crisil Ratings, said that with the loss of orders from the US, the export volume is expected to drop 13-14% this fiscal.