Kolkata Leather Industry Welcomes Union Budget 2026-27 Measures as 'Renewed Hope'
Manufacturers of leather goods in Kolkata have expressed optimism that the measures announced in the Union Budget 2026-27 will provide much-needed relief to struggling units grappling with high raw material costs and declining exports. The industry, which has been facing significant challenges, views the budget proposals as a potential catalyst for recovery and growth.
Key Budget Proposals for the Leather Sector
Union Finance Minister Nirmala Sitharaman, while presenting the budget, introduced several initiatives aimed at bolstering the leather industry. One of the most significant proposals is the extension of duty-free imports of specified inputs, previously available for exports of leather or synthetic footwear, to now include exports of shoe uppers. This move is expected to enhance the competitiveness of Indian leather products in the global market.
Additionally, the budget proposes to extend the time period for export of final products from the existing six months to one year. This extension applies to exporters of leather or textile garments, leather or synthetic footwear, and other leather products. The longer timeline is anticipated to ease working capital constraints and improve supply chain management for manufacturers.
Industry Leaders Applaud Budget Measures
Industry experts have welcomed these proposals, highlighting their potential impact. Zia Nafis, director of Nafis and Tanning Industries, noted, "The inclusion of shoe uppers exporters under the IGCR scheme is a major benefit that will help enhance export of this value-added product, which was to the tune of US$ 222 million in 2024-25."
Ramesh Juneja, chairman of the Council for Leather Exports, emphasized the timing of these measures, stating, "At a time when exporters are exploring alternative markets to stave off the negative impact caused by US tariffs, this budget will be a big boost for the leather sector. Both manufacturers and exporters will reap benefits."
Nari Kalwani, CMD of Asian Leather and Regional Chairman of the Indo German Chamber of Commerce, described the budget as a "big relief and new boost" that outlines a roadmap for the overall growth of the leather industry in Bengal and across India.
Bengal's Leather Industry: Market Size and Export Potential
The leather and leather goods industry in Bengal boasts a market size of approximately Rs 23,000 crore, contributing significantly to India's overall market, which stands at over Rs 45,000 crore. The state leads in leather goods exports within India, with exports valued at Rs 5,600 crore, accounting for about 30% of the country's total leather exports value.
With global brands increasingly diversifying their sourcing strategies, Bengal's leather sector is projected to grow by 10% in the coming fiscal year. The budget measures are seen as timely interventions that could accelerate this growth trajectory by addressing key operational challenges.
Addressing Supply Chain and Working Capital Realities
Yashovardhan Gupta, director of Metropoli Fashions Pvt Ltd, pointed out that the budget acknowledges the practical realities faced by the sector. "By extending export timelines and easing duty-free input norms for leather goods, the budget addresses the working-capital and supply-chain challenges that have long plagued the industry," he said.
These measures are particularly crucial as leather exporters seek ways to mitigate the adverse effects of steep US tariffs. The ability to import inputs duty-free and enjoy extended export periods is expected to enhance the sector's resilience and competitiveness on the global stage.
In summary, the Union Budget 2026-27 has injected a sense of optimism into Kolkata's leather industry, with stakeholders viewing the proposed measures as a strategic step towards revitalizing a sector that plays a vital role in the regional and national economy.
