The leather sector in India stands to benefit significantly from the ongoing Free Trade Agreement (FTA) negotiations with both the European Union (EU) and the United Kingdom (UK).
India-EU FTA:
The EU is India’s largest trading partner, accounting for €124 billion worth of trade in goods in 2023, or 12.2% of total Indian trade.
The proposed FTA aims to reduce tariffs and non-tariff barriers, providing Indian leather exporters with enhanced market access. This is particularly advantageous for small and medium-sized enterprises (SMEs) in the leather sector, as the EU market demands high-quality leather products, offering substantial opportunities for Indian MSMEs.
India-UK FTA:
The UK is a significant market for Indian leather goods, including footwear and accessories. The proposed FTA is expected to reduce tariffs on Indian leather products, making them more competitive in the UK market. This aligns with the UK’s interest in diversifying its trade relationships post-Brexit and can lead to increased exports of Indian leather goods.
Strategic Implications:
Both FTAs are poised to open new avenues for Indian leather exporters, enhancing their competitiveness in European markets. By reducing trade barriers, these agreements can lead to increased exports, job creation, and economic growth within the leather sector. The focus on labor-intensive sectors like leather, textiles, and footwear underscores the potential for significant economic benefits.
The ongoing FTA negotiations with the EU and UK present promising prospects for India’s leather industry, offering expanded market access and potential for increased exports.
