Trump's Tariff Reduction Brings Hope to Uttar Pradesh's Leather Sector
In a significant development for India's export economy, US President Donald Trump's decision to reduce tariffs to 18% on all products from India has injected new optimism into Uttar Pradesh's struggling leather industry. Tanneries and leather manufacturing units in Kanpur and Unnao, which had faced devastating losses since August last year when a 50% tariff was imposed, are now seeing a clear path toward recovery and business revival.
Industry Leaders Express Relief and Optimism
Javed Iqbal, former chairman of the Board of Directors of the Council for Leather Exports, stated emphatically: "This step will certainly help revive the sector and enable exporters to recover the business they had lost." His sentiment reflects the collective relief spreading through the region's leather clusters, where approximately 400 small and large tanneries operate across the two districts—259 in Kanpur and the remainder in Unnao.
Asad Iraqi, Regional Chairman of the Council for Leather Exports, elaborated on the practical implications: "With the reduction in tariff, exporters are now in a position to revive their business and resume discussions with their US buyers. We can once again approach our customers in the US and work together to revive business by bearing some portion of the tariff."
The Devastating Impact of the 50% Tariff
The industry had suffered what experts describe as a major setback after the United States announced the 50% tariff last August. Exporters found themselves completely unable to absorb such a steep duty, forcing numerous units to either scale down operations dramatically or suspend them entirely. Iqbal explained the severity of the situation: "No one could afford a 50% tariff... as a result, work almost came to a standstill. The US is one of our biggest markets because of its strong purchasing power, but that market was nearly closed to us."
Owners of leather and tannery units confirmed that shipments to the United States had remained almost completely stalled since August, creating severe impacts on both production and revenue streams. Many businesses found themselves pushed into serious financial distress during this challenging period.
Economic Significance and Employment Impact
The leather industry in Kanpur and Unnao represents a substantial economic force, with leather exports from these two districts together valued at approximately Rs 8,000 crore annually. Beyond the 400 tanneries, there are an additional 250 leather product manufacturing units in the two districts that produce shoes, belts, jackets, and various accessories primarily for export to international markets.
Collectively, these tanneries and manufacturing units provide employment to nearly 10 lakh people, with a significant portion of the workforce comprising women who form the backbone of this vital sector. Despite the severe financial pressures caused by the high tariff, industry representatives noted that most units avoided complete shutdowns and refrained from laying off laborers, with many owners striving to maintain operations even at reduced capacity to preserve their workforce.
Competitive Challenges and Market Dynamics
During the period of restricted access to the US market, countries such as Vietnam and Bangladesh managed to capture a substantial share of the global leather market, leading to a noticeable decline in India's international presence. This competitive erosion added another layer of urgency to the need for tariff relief.
Interestingly, despite the challenges faced specifically in US exports, India's overall leather exports demonstrated resilience. Data reveals that India's leather exports worldwide increased from $3,681 million in 2020-21 to $4,828 million in 2024-25, representing a 31% growth. During this same period, exports to the United States specifically rose from $645 million to $1,045 million—a remarkable 62% increase that underscores the market's importance before the tariff disruption.
Current Operations and Future Outlook
Currently, industrial units in Kanpur have suspended operations for 45 days during the ongoing Magh Mela in Prayagraj, a temporary measure implemented from December 31 to February 15 to ensure water quality and maintain the sanctity of the Ganga river. This seasonal pause comes even as the industry prepares to capitalize on the improved trade conditions.
Naiyer Jamal, former general secretary of the Small Tanneries Association in Kanpur, expressed cautious optimism about the future: "With improved trade conditions, the industry now expects a gradual recovery and a return to normalcy in the coming months." His perspective reflects the broader industry sentiment that the tariff reduction will facilitate renewed engagement with American buyers and help reclaim lost market share.
The tariff adjustment represents more than just a numerical change—it signifies restored access to a crucial market and renewed hope for thousands of workers and business owners whose livelihoods depend on this traditional yet globally competitive industry.
