A man picks up coloured animal hide before putting it inside a press machine at a tannery in Mumbai
Credit: Reuters Photo
Chennai: Leather goods manufacturers in Tamil Nadu, who account for 30% of the country’s total leather exports to the US, are facing a major crisis as their US buyers are demanding heavy discounts on finished goods and asking them to hold back fresh orders.
This sector is among the hardest hit following US President Donald Trump’s decision to impose a 50% penalty tariff on Indian imports.
Likewise, the seafood industry in Tamil Nadu, which exports frozen shrimp, squid, cuttlefish, sea crabs, and octopus to the US, has also been adversely affected by the high tariff, forcing producers to scale down production. Although Tamil Nadu accounts for just 5% of India’s total seafood exports to the US, it remains a key market -- about 65% of the shrimp exported from the state is sent there.
K V V Mohanan, Vice-President of the Seafood Exporters Association of India (SEAI), told DH that many US buyers have asked exporters to place stocks on hold. “It’s not just that; buyers from other countries importing seafood, like shrimp, are taking advantage of the situation by demanding discounts. We cannot handle this situation alone,” he elaborated.
“US buyers have clearly told us to hold orders and are bargaining hard for discounts,” he added.
Mohanan also called upon the Union Government to reinstate the 3% interest subvention granted to the industry and to resolve export issues with the EU. He also warned that if the situation continues, layoffs are likely.
Tamil Nadu is home to approximately 674 leather and footwear manufacturing factories, with major production hubs located in Ambur, Ranipet, Vaniyambadi, Trichy, Chennai, and Dindigul.
The US tariffs will impact exporters who primarily deal with the American market -- many export over 60% of their goods there. Exporters say that buyers are demanding discounts of up to 20% on completed orders and have sought to put fresh or pipeline orders on hold.
Israr Ahmed, past Regional Chairman of the Council for Leather Exports, told DH that many exporters managed to front load shipments before the deadline, the impact of the tariffs is likely to be felt later in the year.
Ahmed expressed optimism about managing the situation better following an “encouraging ” meeting with Union Finance Minister Nirmala Sitharaman, who promised full support for the industry from the Government .
"She assured us that the Centre will take the necessary steps to support industries affected by US tariffs. She added that the assistance would be given to the affected exporters as was done during COVID pandemic when the Government came to help and support industries. It was a very reassuring meeting," Ahmed added.