The Indian government has announced a significant reduction in Goods and Services Tax (GST) that is set to reshape the future of the country’s leather and footwear industry.
Starting September 22, 2025, the GST rate on finished leather, handcrafted handbags, pouches, purses, sports gloves and footwear priced up to Rs 2500 (~$28) per pair will be reduced from 12% to 5%.
Industry experts believe this move will make Indian products more competitive making them more affordable for local consumers.
The Council for Leather Exports stated that the decision will not only encourage domestic production but also drive demand in the Indian market.
Another crucial reform is the provision of 90% provisional refunds for inverted duty structures and zero-rated supplies.
Exporters say this will greatly improve the ease of doing business and strengthen India’s export capacity.
The reduction of GST on job work of leathers and services of common effluent treatment plants from 12% to 5% has also been welcomed as a lifeline for tanneries and small-scale industries.
Industry leaders have expressed their gratitude to Prime Minister Narendra Modi for leading the reforms and to Union Finance Minister Nirmala Sitharaman and Commerce and Industry Minister Piyush Goyal for their support.
“These reforms will catalyze India’s economic growth and push the leather and footwear industry towards achieving a turnover of USD 50 billion by 2029-30 compared to the current USD 24.6 billion”
Council for Leather Exports
This reform aligns strongly with the vision of an Aatma Nirbhar Bharat, fostering formalization, growth and greater investment in innovation and quality manufacturing
V Noushad, Chair, CII Task Force on Footwear & Managing Director, Walkaroo International Ltd
The GST cuts are being seen as a turning point for the sector that has long demanded policy support. By lowering costs for consumers and reducing burdens for manufacturers, the reforms set the stage for a stronger and more competitive industry both at home and abroad.
