The free trade agreement between India and the UAE does not seem to have brought much fruit for the Indian garment export industry.
According to official statistics, during January-November 22, India’s garment exports to the UAE decreased to US$1.16 billion, compared to US$1.83 billion in the same period last year, a year-on-year decrease of 36.32% basis.
The UAE also slipped to third place in the ranking of India’s top apparel export destinations, while the UK rose to second place – thanks to the latter’s aggressive sourcing from India.
It is worth mentioning that India and the United Arab Emirates officially signed the “Comprehensive Economic Partnership Agreement” (CEPA) in May 2022. It is speculated that India’s trade with Middle Eastern countries will be boosted.
However, according to the Indian government, after the implementation of CEPA, the UAE market saw a significant increase in exports of gemstones, jewellery, confectionery, grains and non-textile apparel industries such as electrical machinery!
According to further analysis Clothing Resourceseven in the first eight months of FY23 (April-November 22) – which happens to be the period when CEPA was implemented – India’s garment exports plummeted by 42.19% in the UAE market to a mere USD 7.7452 billion compared to $1.34 billion in the same period in FY22.
The decline in the UAE market has proven to be a headwind for Indian exporters that have done well in other parts of the world.
As of November FY22, India exported garments worth USD 15.29 billion to the global market, registering an annual growth rate of 11.07%.