The United States has increased import duties on Indian leather products to 60%, which is double the tariff on Chinese goods and significantly higher than those on Pakistan (19%) and Bangladesh (20%). This decision has plunged Kanpur's leather industry into a severe crisis, where exports worth ₹2000 crore are sent to America annually. Business owners fear this hike could completely halt their exports.
American Buyers Retreat
Zafar Iqbal, a leather exporter and factory owner from Kanpur, expressed that shipments have been halted due to the new tariffs as American buyers are backing out. He recalled that in May, when the tariffs were at 10%, they managed to sustain orders by absorbing half the cost. However, such hefty duties are unbearable now. With five containers ready, they are unsure of the next steps.
Double Whammy on the Industry
Exporter Nayar Jamal mentioned that the industry was already grappling with challenges due to environmental regulations like Namami Gange. Now, the tariff hike has added to their woes. Nonetheless, he supported the government's stance, stating that they should not bend under America's pressure.
Threat to Ten Lakh Jobs
Leather entrepreneur Javed Iqbal warned that this tariff increase threatens the jobs of nearly 10 lakh people in Kanpur and neighboring Unnao. Due to lower tariffs in Pakistan, China, Vietnam, and Cambodia, American buyers might turn their attention there. He expressed support for the government, even if it means bearing significant losses.
Production Stagnant Despite Festive Orders
Prerna Verma, an exporter of leather accessories, reported confusion over the new policy, which has nearly halted production. Demand had already dropped by 60% in recent years, forcing some units to lay off workers. Chairman of the Council for Leather Exports (Central Region), Asad Iraqi, stated that despite receiving Christmas orders, production for the US market has stopped.
He met with the Union Commerce Minister Piyush Goyal in Delhi a couple of days ago to discuss relief measures like interest subsidies in the scenario of a 25% tariff. However, with tariffs now at 50%, these measures seem inadequate. Iraqi mentioned that buyers and sellers can handle an additional 5-10% cost, but such a drastic increase is unmanageable.
