Impact of Middle East Tensions on India's Leather and Footwear Industry

The leather and footwear industry in India is facing significant challenges due to rising tensions in the Middle East, which have led to a sharp increase in raw material costs. With prices soaring by up to 60%, the industry is calling for government intervention to alleviate the financial strain. Key concerns include disruptions in the Strait of Hormuz affecting supply chains and a plea for the implementation of the FLOAT scheme to support the sector. As exports begin to decline, experts warn of potential long-term damage if the situation does not improve. The industry is urging the government to act swiftly to protect jobs and stabilize costs.

By Narendra Chaudhary May 3, 2026, 18:56 IST

Rising Costs in the Leather and Footwear Sector

The escalating tensions in the Middle East are beginning to significantly affect India's leather and footwear industry. There has been a sudden spike in raw material prices, leading to increased production costs and diminishing profits. In light of these challenges, the industry is urgently seeking relief from the government.

Surge in Raw Material Prices

According to industry insiders, the prices of synthetic leather, chemicals, machinery, and other essential inputs have surged by 40 to 60 percent. This increase is largely attributed to the crisis in West Asia, which has disrupted oil and gas supplies. Many of these products are petroleum-based, resulting in rapid cost escalations.

Concerns Over the Strait of Hormuz

Iran's interference in the Strait of Hormuz has hindered the movement of oil and gas vessels. This strait is one of the most crucial maritime routes globally. The disruption has affected supply chains and led to rising raw material costs. Consequently, the industry is urging the government to reduce import duties. They are advocating for lower or eliminated duties on essential inputs such as synthetic leather, metal accessories, threads, molds, machinery, and packaging materials to help control costs.

Call for Implementation of the FLOAT Scheme

The industry has also requested the government to expedite the implementation of the Footwear and Leather-Oriented Transformation (FLOAT) scheme. This initiative is expected to provide support across the sector, potentially boosting production and exports.

Export Challenges

The rising costs are also impacting exports. In the fiscal year 2025-26, there has been a slight decline in the export of leather and leather products. However, the industry remains hopeful that the inclusion of non-leather products will improve overall export figures. Experts warn that if the situation persists, the industry could face further setbacks. It is crucial for the government to take timely action to provide relief and protect jobs.