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Leather & Footwear
2nd Largest Export Earner Driving Sustainable and Scalable Growth
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largest global footwear producer
footwear making units
of global leather demand met
YoY export growth in CY 24
The leather and footwear industry is Bangladesh’s second-largest export sector after ready-made garments, contributing to approximately 3% of the global leather goods market and meeting nearly 10% of global leather demand. Designated as a priority sector for export diversification under the Industry Policy 2022, the industry is positioning itself as a global sourcing hub, backed by a cost-competitive workforce, abundant raw materials, and targeted policy incentives.
In 2024, exports from the sector reached USD 1.5 billion, registering an impressive 45% year-on-year growth. The government and industry are aligned in their ambition to scale this figure to USD 5 billion in annual exports within the next five years. Bangladesh’s footwear exports are well-diversified across key global markets including the USA, UK, Germany, France, Italy, Japan, China, South Korea, and Canada. The non-leather segment is speedily gaining ground, with exports to Spain, France, the Netherlands, South Korea, India, and China, meeting rising demand for sustainable alternatives. With up to 90% value addition potential and a flexible cost structure, Bangladesh is increasingly attracting the relocation of production from China, particularly in footwear and leather goods manufacturing.
Spanning the entire value chain—from tanning and finishing to leather accessories and finished goods—the sector employs around 850,000 people, with women making up 60% of the workforce. Bangladesh is also advancing in environmentally responsible leather processing, supported by a growing base of skilled and semi-skilled workers, including qualified leather technologists. With strong fundamentals and policy push, the leather sector is set to mirror the success of garments to become Bangladesh’s next global manufacturing powerhouse.
Growth Drivers
Green Manufacturing & Infrastructure Development
Three specialized leather industrial zones are under development in Savar, Rajshahi, and Chattogram, enabling ESG-compliant production. The Savar Tannery Estate, now home to 205 eco-certified tanneries, is leading the sector’s green transition.
Expanding Export Base
- 24% YoY growth in leather footwear exports in FY24
- 23% CAGR in non-leather footwear exports over the past decade
- The United States is the primary destination for Bangladeshi leather footwear
Abundant Raw Material Supply
With over 200 tanneries and 2.4% of the global livestock population, Bangladesh processes 35 million square feet of leather annually. Its bovine and ovine hides are internationally acclaimed for quality, and the country contributes 1.13% of global leather output—largely from domestic raw material sources.
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Robust Domestic Market & Production Capacity
The footwear industry comprises over 3,500 MSMEs and 90 large-scale firms, collectively producing around 378 million pairs annually—with 53% to 66% consumed locally, underscoring strong domestic demand.
KEY PLAYERS
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- Reduced Corporate Income Tax (CIT) for 5–10 years based on location.
- 50% tax exemption on income from exports.
- No VAT on export goods.
- Import duty-free capital machinery.
- Regulatory duty waivers for key raw materials (plastic, PVC, textiles, etc.).
- Bonded warehousing facilities for large-scale raw material imports.
- 2% cash incentive on non-leather goods and footwear exports.
- Leather and Leather Products Development Policy 2019 has comprehensive incentives to boost exports.
- Ministry of Industries
- Ministry of Commerce
- Leather Goods & Footwear Manufacturers & Exporters Association of Bangladesh (LFMEAB)
- Bangladesh Tanners Association (BTA)
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