How Trump’s 50% tariff has hung Tamil Nadu’s tanneries out to dry

CHENNAI: Despite the scorching heat in Periyavarigam village in Tamil Nadu’s Vellore district, around 200km inland from Chennai, the Ambur Pernampet Road is bustling with people. Workers, looking worried, stand in groups, discussing their future.

The usual clatter of tanning machinery that processes raw hide into leather is missing. At least 50 of the 300-odd factories in Ambur have downed shutters.



The Ambur-Ranipet belt is an arid region, barely cooled by the Palar river, which has suffered drought and pollution because of effluents from tanneries for decades. In this land, where agriculture struggles, the leather-tanning industry was booming, employing more than a million people — until Aug 27, when US President Donald Trump imposed a 50% penal tariff on Indian goods.

India’s leather goods and nonleather footwear exports to 200 countries across the world touched $4.4 billion in 2024-2025, of which $1 billion was to the US.

Now, India is losing out to Vietnam, China, Indonesia, Bangladesh and Mexico, which have lower tariffs. Tamil Nadu, along with Agra and Kanpur, accounts for 70% of Indian exports to the US — mostly shoes, wallets, belts and bags. Half of the state’s leather exports are to the US.

Future tense for workers
For P Gopi (42), a cutting machine operator at Farida Leather Factory in Chinnavarigam village near Ambur, life has looked uncertain since he was sent on unpaid leave three weeks ago. “I am struggling to pay education fees for my son and two daughters,” says Gopi, who used to earn Rs 450 a day. His daughters, both nursing students, were sent back home because they couldn’t pay college fees of Rs 1.5 lakh each.

Gopi’s co-worker S Thandapani (49), whose workdays have shrunk from four a week to one, is in the debt trap called ‘ kandhu vetti ’ (usury). His two daughters, too, had to return home from nursing colleges, because of unpaid fees. And scores of guest workers from Odisha, Assam, Bihar and Bengal have either headed home or are waiting in dormitories for the employers’ call.

“Leather workers were anyway in trouble, as most Indian shoemakers have shifted to materials other than leather,” says Senthil Murugan, who supplies raw materials and technical expertise to leather goods makers. “Now, the 50% tariff has struck a lethal blow to the industry.” While factories exporting leather goods to Europe (20% tariff) are functioning, those supplying to US firms have closed or are winding down. Some tanneries are shifting operations to Vietnam and Bangladesh, where the tariff is around 20%.

“Goods are stuck in our warehouses,” says M Rafeeque Ahmed, chairman of Farida Group, which supplies leather goods to the US. “Our company employs around 12,000 workers, of whom 10,000 are women. Most of them may lose their jobs.” Ahmed’s company has tanneries in Vietnam and Ethiopia, as well as shoe factories in Bangladesh, where tariffs are less punishing.
‘No solution is in sight’
US buyers have been asking Indian manufacturers to hold back fresh orders or give heavy discounts. Some of the factories are trying to explore the UK market. “We are at a loss, planning raw materials, finance and employee costs. No solution is in sight,” says KKSK Rafiq, managing director of KKSK International Group, which has leather factories in Erode and Ambur. “We are working at 90% of installed capacity, and suddenly the volume has less than halved. Our losses run into several crores. We hope the govt comes up with a scheme for employees for a few months, until the problem is sorted out.”

Equally anxious is Amburbased R Rajendran, a Nepali settled in Tamil Nadu since 1984. Rajendran works for Everest Overseas, which supplies labour. “Orders are not coming and our future is uncertain,” says Rajendran, whose company supplies close to 40% of workers from the north to factories in Ambur and Ranipet. Arunachal Pradesh native Seeman Munda (36) and his wife Muktha (35) from Assam say they wouldn’t know what to do if they lost their job.

The situation in northern states is no better. “Customers have cancelled shipments. We are working on breakeven margins,” says Kulbhushan Solanki, vice-president, operations, of Gurgaon-based Tangerine Skies, a leather goods maker. There are eight to 10 big factories and 40-50 MSME factories in Agra that make footwear.

There are some 2,000 tanneries and 2,000 leather goods manufacturing companies in the country, spread across Kanpur, Noida, Agra and south India, especially Tamil Nadu. “The northern states are famous for safety shoes and upholstery leather,” says US-based Tannin Corporation’s technical manager for Asia, M Karthikeyan. “Fashion leather factories are asking workers not to come three days a week. There have been no new orders in the past couple of months.”

Council for Leather Exports and Federation of Indian Export Organisations (FIEO) have been in talks with finance minister Nirmala Sitharaman, but to no avail. FIEO has pleaded for an interest equalisation scheme and strengthen market access initiative and give temporary support for exports to the US, facing reciprocal tariffs and statutory contributions to prevent job loss.