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In a move believed to bring relief for processed seafood, leather and synthetic footwear exporters in India, the Union Budget 2026-27 proposes easing customs duties on imports of certain inputs needed for these products. Announcing the measure in her Budget speech on February 1, Finance Minister Nirmala Sitharaman said the move is part of the Union government’s effort to simplify the tariff structure, support domestic manufacturing and improve export competitiveness.
For the leather and synthetic footwear sector, the Budget proposes extending duty-free imports of specified inputs, currently available for exports of finished leather or synthetic footwear, to exports of shoe uppers (all components of a shoe that are above the sole).
Further, the deadline to complete the export of the final product has been increased from six months to one year. This deadline will be applicable to all exporters of leather or textile garments, leather or synthetic footwear and other leather products.
These proposals could bring the much-needed relief to the leather and synthetic footwear industry, currently grappling with steep tariffs in the US. In 2025, US President Donald Trump imposed a total of 50 per cent tariffs on the sector (25 per cent reciprocal tariffs and 25 per cent penalty linked to India’s purchase of Russian oil). These tariffs served a major blow because, according to the credit rating agency CRISIL Ratings, the US is the second-biggest export destination of Indian leather products after the EU.
In an October 23, 2025 analysis, CRISIL said that the US tariffs will slash India’s leather export volume, and the sector is likely to see revenue decline by 10-12 per cent year on year this fiscal. Analysts were hopeful, however, that a boost in domestic demand and manufacturing could stabilise the market. India’s recent free trade agreements with the UK and the EU have also provided support, according to media reports.
The Budget also proposes to raise the limit for duty-free imports of specified inputs used in processing seafood products for export, from the current 1 per cent to 3 per cent of the free-on-board (FOB) value of exports in the previous year. The FOB value reflects the transaction value of goods, including all costs, fees, and taxes incurred to bring the goods to the port of shipment and load them onto the vessel.
In contrast to the leather and synthetic footwear industry, the seafood sector has seen an increase in exports in recent months. A December 2, 2025, article published by the Union Ministry of External Affairs’ Economic Diplomacy Division, citing Economic Times data, stated that India’s seafood exports rose by 11.6 per cent year-on-year from April to October last year. The increase was driven by higher shipments to the EU, China, Vietnam, Russia and the UK, which helped offset the shortfall in exports to the US. The boost provided in the Budget could add to this gain.