The ongoing crisis in West Asia is no longer affecting only oil markets and shipping routes. It is now directly impacting India’s export manufacturing sectors, especially leather and footwear. India’s leather and footwear industry has recently asked the government for duty exemptions on critical imported inputs after raw material costs surged by as much as 40–60 percent. The industry says the disruption is threatening manufacturing competitiveness and export stability. At first glance, this appears to be a temporary geopolitical issue. But the bigger reality is more important: India’s export industries remain deeply vulnerable to external supply chain shocks.
Why the West Asia Crisis Is Hurting the Sector
Many key materials used in leather and footwear manufacturing are linked directly or indirectly to petroleum products. Synthetic leather, adhesives, plastics, rubber chemicals, shoe soles, and packaging materials all depend heavily on oil-based supply chains.The disruption around the Strait of Hormuz has increased transportation uncertainty and input costs across these materials. Since India imports several critical components from countries such as China, Japan, Indonesia, and South Korea, the impact is spreading across the entire manufacturing chain.This is why the industry is demanding import duty exemptions on:
synthetic leather
footwear components
chemicals
machinery
moulds and accessories
The goal is simple: reduce operational pressure before export competitiveness weakens further.
The Real Issue Is Supply Chain Dependence
The current crisis reveals a structural weakness in India’s export ecosystem. India has strong manufacturing capabilities in leather and footwear, but many critical inputs still depend on global supply chains. When geopolitical tensions disrupt shipping lanes or energy markets, domestic manufacturing costs rise immediately. This creates a dangerous situation for exporters because international buyers continue expecting stable pricing and reliable delivery timelines even during global disruptions. Countries with stronger supply chain resilience recover faster. Countries dependent on fragmented imports face operational stress much more quickly.
Export Pressure Is Already Visible
The pressure is already appearing in trade numbers. India’s leather and leather product exports reportedly declined by 2.36% year-on-year to approximately $4.26 billion in 2025–26. Imports in the sector also dropped as rising costs and supply uncertainty affected operations. While the industry still expects overall exports to remain near $5.6 billion once non-leather categories are included, the slowdown highlights how sensitive export sectors are to external disruptions.
Why Duty Exemptions Alone Are Not Enough
The industry’s demand for temporary duty relief may help reduce immediate cost pressure, but it does not solve the larger challenge. The bigger issue is operational resilience. India’s export sectors need:
stronger domestic input ecosystems
diversified sourcing networks
faster logistics systems
reduced import dependency on critical materials
Without structural improvements, every geopolitical disruption will continue creating similar operational stress.
A Larger Shift Is Happening in Global Trade
The leather and footwear industry is not the only sector affected. Across global trade, governments and industries are increasingly realizing that efficiency alone is no longer enough. Supply chain resilience is becoming just as important as low-cost manufacturing. This is changing how countries think about:
sourcing strategies
industrial policy
trade infrastructure
manufacturing security
The industries that survive future disruptions will likely be the ones that can localize critical inputs and build more adaptable supply chains.
The West Asia crisis may appear temporary, but the vulnerabilities it exposed are long term. India’s leather and footwear sector is facing rising costs today because global supply chains remain deeply interconnected and operationally fragile. The demand for duty exemptions reflects immediate industry pressure, but it also highlights a much larger challenge facing export-driven manufacturing. The future competitiveness of Indian exports will depend not only on production capacity, but on how resilient and self-sustaining supply chains become in an increasingly unstable global trade environment.