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Published : 06 Jul 2026, 01:05 PM
Exporters and market analysts have found reason for optimism in the latest leather export figures, even as old problems at the Savar Tannery Industrial Estate remain unresolved.
The sector earned $1.23 billion in the 2025-26 financial year, the third-highest in Bangladesh's history, and up 7.07 percent from the previous year.
Leather is the only sector besides ready-made garments to bring in more than a billion dollars in export earnings for Bangladesh, yet its progress has stalled due to a host of constraints.
It has been nearly a decade since tanneries relocated from Hazaribagh to Savar, where the tannery estate now stands, but the shift has yet to pay off.
With the estate still not fully ready, international bodies are withholding certification from factories there, complicating exporters' efforts to sell processed leather and leather goods produced at the site.
Industry figures say export earnings could climb further if the government offers proper policy support and gets the Savar estate fully operational.
Export Promotion Bureau (EPB) data show Bangladesh earned a record $1.25 billion from leather and leather goods exports in FY22, before earnings fell over the following two years.
The figure dropped to $1.18 billion in FY23 and further to $1.04 billion in FY24.
The sector staged something of a comeback in FY25 despite political instability and uncertainty following the change of government, earning $1.15 billion, with year-on-year growth of 10.20 percent.
That upward trend held through FY26, the fiscal year that ended on Jun 30.
Export earnings from leather rose 47.68 percent in June alone, bringing in $128.85 million, compared with $87.25 million in the same month last year.
Of the $1.23 billion earned across the full year, leather goods exports contributed $400.4 million, up 16.13 percent.
Leather footwear brought in $691.7 million, up nearly 3 percent from the previous financial year.
Other leather exports earned $134.14 million, a rise of 4.63 percent over FY2025.
‘Opportunity Must Be Seized’
Abdur Razzaque, chairman of the Research and Policy Integration for Development (RAPID), a private think tank, attributes the rising earnings mainly to three factors.
The first, he said, is the geopolitics of the global trade war.
After Donald Trump began his second term as US president and imposed retaliatory tariffs on China, American importers started looking for alternative sourcing destinations, with some of the orders shifting away from China landing in Bangladesh, creating an opening for the country's leather and footwear industry.
Second, Europe and the US have increased imports as they recover from the shock of inflation, he said, and third, because Bangladesh's export base is comparatively small, even modest gains show up as large percentage increases.
"Sustaining this positive trend will require expanding infrastructure and port facilities, arranging faster clearance of goods, and focusing on securing environmental certification," Razzaque said.
Exporters say the US is now the biggest market for leather footwear and leather goods, and that the recent surge in earnings is largely down to Trump's tariff policy.
Shaheen Ahamed, chairman of the Bangladesh Tanners Association (BTA), recalled that many orders had shifted to Bangladesh from China even during the COVID-19 pandemic, raising hopes for the leather sector at the time, hopes that were dashed by the Russia-Ukraine war.
Now, he said, the light of opportunity seems to be shining once more.
He said Europe is a key market for leather goods, and the war hit European countries hardest, forcing people there to spend more on food and cut back on shoes and other goods, which dragged down Bangladesh's exports to the region for two years.
Trump's tariff policy has now put Bangladesh's leather products in a somewhat more favourable position in the US market compared with India, Vietnam or Indonesia, Ahamed said.
"As a result, foreign investors are showing interest in investing here, particularly those from China and the United States, who may look to enter Bangladesh," he said.
Ahamed, however, acknowledged that buyers remain unhappy with conditions at the Savar tannery estate.
He said buyers refuse to purchase products made using leather sourced from the estate, forcing exporters to buy raw materials from third-party companies outside the estate instead.
To preserve the fresh opportunity now emerging in leather exports, the industrialist called for urgent steps from the government and tannery owners to improve conditions at the Savar estate.
Apex Footwear alone accounts for around 15 percent of the foreign currency the leather sector brings into the country each year.
The company exports footwear to Germany, Italy and other European countries, and has begun shipping to the US and Canada as well.
Syed Nasim Manzur, managing director of Apex Footwear, said the sector was seeing fresh hope overall, adding that exports would rise further if the new government fully readies the Savar estate and ensures that products made using leather from its factories can be exported to all markets.
"An opportunity has come around again. The government and the private sector must work together to make the most of it," he added.
Where Do Hurdles Lie?
According to the Leather Goods and Footwear Manufacturers and Exporters Association of Bangladesh, China controls 55 percent of the global footwear market, with India and Vietnam also holding strong positions.
Bangladesh ranks 18th worldwide, with a market share of just 1.7 percent.
Once seen as a sector full of promise, leather had been sliding, falling from second to fourth or fifth place among Bangladesh's top export earners, before climbing back to third in 2021-22.
Industry insiders attribute the sector's struggles to the prolonged complications surrounding the shift of tanneries from Dhaka's Hazaribagh to the Savar estate.
The then government took up a project in 2003 to relocate the tanneries to Savar and build an environmentally sound industrial estate, originally meant to be completed within three years.
Nearly a decade and a half on, the estate has still not become fully environmentally compliant.
Even though the project has remained unfinished, the High Court ordered the closure of Hazaribagh's tanneries in 2017, shutting down all factories there.
Several of those factories had held certification from the Leather Working Group (LWG), a global platform whose accreditation allowed them to export leather to Japan, South Korea, Europe and America.
With the Hazaribagh factories shut, they lost both that certification and their foreign buyers.
Because the Savar estate remains incomplete even after all this time, the factories there have yet to regain LWG certification, and no new markets have opened up.
Without that certification, they cannot export leather to Japan, South Korea, Europe or America under the LWG framework.
This restriction also prevents exporting companies that use raw materials from these factories from exporting the finished products made from them.
A study by the Bangladesh Small and Cottage Industries Corporation (BSCIC) and the Bangladesh Investment Development Authority (BIDA) found that securing LWG certification requires scoring 1,710 points across 17 criteria assessing the environmental standards of leather factories.
Of these, 300 points relate to the Central Effluent Treatment Plant (CETP), while the remaining 1,410 points cover energy costs, water use, chemical management, air pollution, noise pollution, traceability of leather sources, and standards of daily operations, among other factors.
Meeting these standards is the responsibility of tannery owners.
Currently, 15 to 20 tanneries have the capacity to meet the LWG certification requirements.
But while they score well on other criteria, they lag on the CETP-related score, which keeps certification out of reach, because liquid waste and chemicals are not being properly treated at the Savar tannery estate, polluting nearby rivers and the environment.
Only seven companies in the country have so far received LWG certification: Apex Footwear, Riff Leather, ABC Leather, Superex Leather, Saf Leather, Simona Tanning and Ostan Limited.
Three of them produce finished leather.
Within the Savar tannery cluster itself, however, only Simona Tanning holds this certification.
The company produces crust and finished leather.
