Key facts
| Figure | What it measures |
|---|---|
| US$4.75 bn | India’s leather and footwear exports in 2025-26, down 1.6%1 |
| ~52% | of those exports are footwear, leather and non-leather1 |
| 37%+ | of Tamil Nadu’s leather exports came from Ambur, Vaniyambadi and Walajahpet (2017)2 |
| 449 | tanneries in the Palar basin, employing about 50,000 people9 |
| 674 | leather and footwear factories in Tamil Nadu10 |
| ~1.4 lakh | people worked in the Ambur–Vaniyambadi cluster (2013)6 |
| ~80% | of Ambur’s footwear workforce were women (2013)6 |
| 20.5% | of India’s leather exports went to the US in 2025-26; shipments there fell 6.6%1 |
| ~43% | of India’s leather and footwear exports go to the European Union11 |
| 16% → 0% | UK import duty on Indian leather and footwear, from 15 July 202612 |
| 13 | common effluent treatment plants for tanneries in Tamil Nadu9 |
| 186 villages | and 15,165 hectares assessed as harmed by tannery pollution in Vellore district13 |
How it began
Tanning by the river
Tanning needs water, and the Palar valley had it. The traders and tanners of Ambur, Vaniyambadi and Ranipet tanned hides on a large scale, and demand rose sharply when armies needed boots around the First World War. For decades most of this leather left India only half-processed, and other countries turned it into shoes and bags.
Science, then a ban that forced the next step
The Central Leather Research Institute opened in Chennai on 24 April 1948 and became the research base for the trade. In 1973 India stopped the export of raw and pickled hides and skins. Tanners in the belt had to finish the leather themselves, and over the next decades many went further, into shoe uppers and then whole shoes.
The court and the river
Growth harmed the Palar and the wells around it. On 28 August 1996, in Vellore Citizens Welfare Forum v. Union of India, the Supreme Court wrote two ideas into Indian law: the polluter pays, and act before the harm is done. Tanneries built treatment plants, many of them shared, and a Loss of Ecology Authority paid farmers compensation between 1998 and 2005.
The matter came back on 30 January 2025. The Supreme Court found the damage irreversible, ordered the State to pay compensation still owed and recover it from the polluting units, and set up a committee to keep watching the district. It assessed 186 villages and about 15,165 hectares in seven taluks as affected.
Shoes, and the people who make them
By 2013 the Ambur–Vaniyambadi cluster had about 1,620 small units and 18 large ones, employing about 1.4 lakh people, and about four of every five workers in Ambur’s shoe factories were women. In 2017 three towns of the belt, Ambur, Vaniyambadi and Walajahpet, sent out more than 37% of Tamil Nadu’s leather exports.
Science still sits nearby. Between December 2021 and March 2022 the Chennai institute scanned the feet of 1,01,880 people across India, found that Indian feet are generally wider than European sizes assume, and in 2024 proposed an Indian shoe-size system called Bha.
How the business works here
A pair of leather shoes passes through several hands. Salted hides and skins come in from across India. A tannery turns them into wet-blue (chrome-tanned leather), then crust, then finished leather. An upper unit cuts and stitches the top of the shoe, and a shoe factory adds the sole and finishes the pair. Some firms here do one step on job work; the larger groups do every step themselves, from hide to boxed shoe.
Tanning needs a lot of water and salt, and that is where the rules bite. Tamil Nadu has 13 common treatment plants for tanneries, each handling 1.25 to 2.5 lakh litres of waste water a day; others run their own plants. The belt still releases an estimated one lakh tonnes of salt a year. Every square foot of leather made here carries the cost of treating its water.9
The buyers are European and American brands that place orders in dollars or euros, after samples and audits of chemicals and working conditions. The European Union takes about 43% of India’s leather and footwear exports and the US about a fifth. In Tamil Nadu many exporters sent more than 60% of their goods to the US, which is why the 2025 tariff hit this belt hard.14
Under pressure now
Tariffs. The US duty on Indian goods went to 50% from 27 August 2025. Tamil Nadu makers ship about 30% of India’s leather exports to the US, and buyers asked for up to 20% off finished orders and put new ones on hold. By November 2025, at least 50 of Ambur’s roughly 300 leather factories had shut, according to reports. For the full year 2025-26, India’s exports to the US fell 6.6%, while total leather exports fell only 1.6%.15
The river. On 30 January 2025 the Supreme Court held that tanneries had caused irreversible damage in Vellore district. It told the State to pay families still owed compensation under the 2001 and 2009 awards within six weeks and recover it from the polluting units, set up a committee under a retired High Court judge to keep auditing the damage, and asked for per-unit effluent charges to be assessed. The case stays open, so the cost of compliance can still change.13
Where new money goes. Tamil Nadu drew more than ₹9,800 crore of leather and non-leather footwear investment in three years, with more than 1.25 lakh jobs, but most of it went to new parks at Panapakkam, Kallakurichi, Ariyalur, Perambalur and Tindivanam rather than the old belt. New trade deals help: the UK duty on Indian leather and footwear fell from 16% to zero from 15 July 2026, and a deal with the European Union is expected.11
A costing note
In a leather shoe, material is most of the cost, and leather comes as irregular hides, not as rolls. So the number that decides the material cost of a pair is the cutting yield: how many square feet of each hide end up in uppers and how much is offcut. Keep a norm of square feet per pair for each style and size range, and compare actual issues against it every week. A small fall in yield across lakhs of pairs is a large sum.
Two tax points matter. From 22 September 2025, footwear priced up to ₹2,500 a pair carries 5% GST, while many inputs, such as leather chemicals, carry 18%. Credit can pile up, and the refund of that excess under the inverted-duty rule has to be claimed; it does not come on its own. Exporters also wait for refunds, so the cash cycle of a shoe order is longer than its making time. Price quotes in dollars or euros need a stated exchange-rate assumption.16
Effluent treatment is a real cost of every hide, not an overhead to be spread by guesswork. The fair way is to charge common-plant fees and own-plant running costs to products by the volume of waste water or the weight of hide processed. That is also the method the cost accounting standard on pollution control cost (CAS-14) expects.