Leather and allied products industry in India to see revenue decline of 10-12% in FY26: Crisil
Crisil Ratings in its latest report has said that the leather and allied products industry in India will see revenue decline of 10-12 per cent on-year this fiscal (FY26) 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. The US is a major market for domestic leather players.
The report said given the significant 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. It said the leather and allied products industry is estimated to have logged a revenue of about Rs 56,000 crore in fiscal 2025, and exports accounted for about 70 per cent of the revenue pie. A large chunk of the exports was to the European Union (over 50 per cent) and the US (about 22 per cent).
It said signs of a slowdown in the US export demand were already visible with the 25 per cent reciprocal tariff taking effect in the first week of August. It noted that the additional 25 per cent punitive tariff, effective August 27, 2025, has placed India at a further disadvantage vis-a-vis other major exporting nations such as Cambodia, Italy, Vietnam and France, where the US tariffs are lower at 15-20 per cent.
