DGFT Reforms Leather Export Norms: Procedural Barriers Removed to Aid MSMEs

The leather sector in India is dominated by Micro, Small, and Medium Enterprises (MSMEs), which account for a large share of production and employment.

In a significant policy shift aimed at simplifying trade and empowering exporters, the Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce & Industry, has issued Notification No. 15/2025-26 dated May 26, 2026, removing long-standing procedural restrictions on the export of value-added leather products. This reform aligns with the Indian government’s broader agenda to streamline business operations, lower compliance costs, and improve the country’s standing in global trade, especially in high-potential sectors like leather.

Key Policy Changes: Simplifying Leather Exports

The two major changes introduced in this notification include:

1. Removal of Port Restrictions Exporters of Finished Leather, Wet Blue Leather, and EI Tanned Leather are now free to ship their goods from any port or Inland Container Depot (ICD) across India. Previously, such exports were limited to a set of DGFT-notified ports, which often resulted in logistical delays and increased shipping costs—particularly for exporters based far from these specified points.

2. Abolition of Mandatory CLRI Certification The requirement to obtain testing and certification from the Central Leather Research Institute (CLRI) for the export of Finished Leather, Wet Blue Leather, Crust Leather, and EI Tanned Leather has been revoked. This measure significantly reduces bureaucratic red tape, expediting the time to market for exporters and eliminating the costs and delays associated with testing.

Background and Rationale Behind the Reforms

These procedural mandates were originally instituted to distinguish value-added leather exports from raw hides and skins, which are subject to different regulatory and tariff treatments. However, industry feedback and evolving market conditions indicated that the earlier controls were no longer relevant:

• The removal of export duties on these leather products diminished the incentive for evasion or misclassification.

• A clear physical differentiation between processed (tanned or crusted) and raw leather makes it easy for customs officials to identify and verify goods.

• The redundant checks were acting as deterrents to small and mid-size enterprises (MSMEs), impacting India’s export competitiveness in a globally lucrative sector.

The decision came after a round of comprehensive consultations with industry stakeholders, including the Council for Leather Exports (CLE), Leather Exporters, and the CLRI itself. The collaborative nature of these reforms is expected to ensure smoother adoption and immediate benefits to traders.

Impact on Exporters and MSMEs

The leather sector in India is dominated by Micro, Small, and Medium Enterprises (MSMEs), which account for a large share of production and employment. The earlier restrictions disproportionately affected these players by:

• Imposing high logistics costs due to designated port requirements.

• Delaying shipment timelines due to mandatory CLRI testing.

• Adding procedural complexities that were harder for smaller businesses to manage.

By lifting these barriers, the government is enabling faster processing, lower transaction costs, and better operational flexibility, particularly for MSMEs located in remote or non-metropolitan areas.

Strengthening India’s Global Leather Trade

India ranks among the top leather producers and exporters globally, with products ranging from leather garments and footwear to accessories and industrial items. These reforms are set to enhance India’s positioning in global markets by:

• Boosting competitiveness in value-added leather segments.

• Encouraging greater participation of smaller exporters in international trade.

• Supporting logistics optimization, which is critical for time-sensitive orders and high-quality exports.

• Maintaining quality standards through general customs oversight rather than redundant parallel certifications.

According to trade analysts, India could see a notable uptick in leather exports in the coming fiscal year as these procedural bottlenecks are eliminated, making it easier for exporters to meet global demand more efficiently.

Ongoing Commitment to Reforms

This initiative is part of a broader effort by DGFT and the Ministry of Commerce & Industry to improve the ease of doing business, particularly in labor-intensive and export-oriented sectors. Similar measures in other industries are expected to follow, focusing on digitization, procedural simplification, and stakeholder engagement.

Exporters and stakeholders can find the official notification and further details by visiting the DGFT website.

A Welcome Relief for Exporters

By abolishing outdated controls and empowering exporters with greater flexibility, India is taking decisive steps toward reinforcing its role as a global trade leader in leather goods. This reform not only supports the “Make in India” and “Export from India” goals but also strengthens the voice of MSMEs—the true engine of India’s manufacturing and export landscape.