Will India's leather and footwear exports to the UK reach $1 billion?

New Delhi, July 28 (NationPress) India's leather and footwear exports to the UK are projected to nearly double from $494 million in 2024 to $1 billion within three years, following the recent signing of a bilateral free trade agreement, as stated by Commerce and Industry Minister Piyush Goyal on Monday.

This agreement not only simplifies customs procedures but also aligns technical standards and safeguards Indian Geographical Indications (GI) like Kolhapuri footwear and Mojari. This will provide Indian products with greater visibility in the UK's $8.7 billion leather and footwear market, the minister noted during a meeting with exporters.

Key manufacturing hubs across India are poised to gain significantly, with a forecasted increase in demand expected to create thousands of new jobs, particularly benefiting MSMEs, artisans, women entrepreneurs, and youth-led businesses, he mentioned.

The India-UK Comprehensive Economic and Trade Agreement (CETA) abolishes the UK’s import duties on Indian products, which previously ranged from 2% to 8% for leather goods, 4.5% for leather footwear, and 11.9% for non-leather footwear. This levels the competitive landscape for Indian exporters against rivals like Bangladesh, Cambodia, and Vietnam, who previously enjoyed preferential access to the UK market.

By providing duty-free access and easing regulations, the India-UK CETA bolsters pricing power and global visibility for Indian manufacturers, especially in the high-demand sectors of leather and fashion products in the UK.

Government initiatives such as the Indian Footwear and Leather Development Programme (IFLDP), with a budget of Rs 1,700 crore, alongside the proposed Focus Product Scheme for the leather and footwear sector, support capacity expansion, technology upgrades, the establishment of mega clusters, design studios, and international brand promotion, as highlighted by the minister.

The Department of Commerce organized an industry interaction with key stakeholders from the textiles, leather, and footwear sectors to explore the opportunities arising from the India-UK Comprehensive Economic and Trade Agreement (CETA).

Goyal emphasized that this agreement represents a transformative opportunity for India’s textiles, leather, and footwear sectors, noting that the CETA also positions India’s textile sector for a significant surge in exports.

The agreement grants Indian textile and clothing products duty-free access to the UK market, addressing the duty disadvantages (of up to 12%) that the Indian textiles sector faced in the UK compared to key competing countries like Bangladesh, Cambodia, and Pakistan. This zero-duty market access is set to benefit various segments, including ready-made garments, home textiles, carpets, and handicrafts, paving the way for a significant rise in exports.

The agreement is anticipated to boost the demand for Indian textiles, favoring major textile clusters such as Tirupur, Jaipur, Surat, Ludhiana, Panipat, Bhadohi, and Moradabad. The CETA is expected to have a positive influence across the textiles value chain, benefiting multiple stakeholders and increasing employment in this labor-intensive sector.

Representatives from various Export Promotion Councils and industry associations welcomed the India-UK CETA, asserting that the duty-free access will enhance the competitiveness of Indian products and level the playing field for Indian textile exporters. During discussions, the need for follow-up actions by the textiles industry to fully leverage the benefits provided by the FTA was also highlighted.