[ad_1]
India currently accounts for 43% of the UAE’s apparel imports, making the UAE one of the major buying destinations for the Indian apparel export industry. It has been more than a year since India and the UAE signed the historic Comprehensive Economic Partnership Agreement (CEPA) or Free Trade Agreement (FTA) on 18th February 2022 (effective from 1st May 2022). As a result of these moves, India is now exempt from the 5% duty on textiles and apparel, which is a great advantage for Indian companies. In FY24, the results are estimated to be profitable, although in the overall picture there has not been much positive impact on the ground so far.
The agreement is also of greater importance as it is India’s first comprehensive trade deal in a decade. It was claimed at the time that the agreement would unlock the unlimited potential that both countries possess and would provide a huge boost to several industries including textiles. The benefit of the agreement for the textile sector is that exports are expected to increase by $2 billion over the next five years. Notably, duty-free exports of man-made fibers (MMF) are projected to be $650 million per year over the next five years. Clothing exports to the UAE also meet the clothing needs of Saudi Arabia, Kuwait, Bahrain, Oman and the United Kingdom. It is a large retail market with players across the value chain, including large Western fashion chains as well as wholesale buyers from North Africa and the Middle East.
Therefore, the huge influence of the UAE on India cannot be denied, but despite this, India’s apparel exports to the UAE in 2022-2023 (April-January) are only $998.55 million, while in fiscal year 2021-2022, India’s exports The clothing value of the clothing is 1,824,910,000 U.S. dollars. In 2022, the UAE’s apparel imports will total US$4.9 billion.
Even before Covid 2018-19, India’s garment exports to UAE were valued at $1,991.15 million.
Hence, India fails to take any advantage of the trade agreement in 2022-23. There are many external factors that prevent India from making significant progress towards growth.
Depressed mood in recent months
Over the past few months, exporters working with top UAE companies have observed depressed Emirati buyers as they are not happy shopping in their stores. As a result, new orders are hard to get confirmed until stocks are cleared. Even top brands are suspending deliveries and promising to pick them up later.
Supplies womenswear to Apparel Group and Aeropostale (UAE), Ameer Hasan, Director, Apmode International, Jaipur I believe because there is no order Ramadan From the UAE, it may take 3 to 4 months to improve overall order bookings in this important market.
Depends on product category and material basis
In terms of womenswear (knitted and woven), there is greater demand for polyester garments and cost-effective products in the UAE, but many Indian exporters are still lacking in this regard. But with developments such as MMF’s PLI program and the industry’s increased focus on polyester, there will be fewer availability and price issues in this area going forward.
Most Indian exporters, especially small ones, who work with the UAE or serve customers in Dubai, have one or two regular clients and they work with them in a regular way. So for them, the free trade agreement did not bring significant benefits on the ground.
Mainly provide cotton clothing, Prabhat Kumar Sadh of KK Global Exports, Noida Agreed with this as his 2 UAE clients are continuing their day to day business even after the FTA.
One such category is childrenswear, which has many advantages and is not dependent on polyester, and this product category is the least affected by market sentiment. Some Indian children wear exporters exporting children wear to UAE are growing well and their business in UAE has been growing well in the last 5-7 months. They witness more inquiries and momentum for future business.
“I’ve seen a 15 to 20 percent increase in my business in the UAE, mainly due to free trade agreements. It’s a growing market and I hope there will be more growth in the future,” he said Amit Goenka, Director, Moozoo Fashions, Kolkata Who works with wholesalers and retail chains in UAE.
Many exporters have direct business with countries like Kuwait and Saudi Arabia, so they have nothing to do with this FTA, but since there are very few wholesalers and importers in the UAE supplying garments to these countries, as well as some African countries, the FTA has nothing to do with Indian exporters who work with such wholesalers and importers can take advantage of this.
FY24 set to be strong
UAE’s large leading group like clothing group, Landmark Group, red label And major UAE buyers are expected to place orders in India soon, as in mid-March due to Ramadan Stockpiles are expected to be cleared by this time.
A top procurement expert for such organizations, who spoke on condition of anonymity, told Apparel Resources (AR) Few of the leading retailers have recently placed good rush orders during this shopping time Ramadan.
For almost a month and a half, several international retailers such as Carrefour have been offering attractive discounts, starting from the third week of February, to attract the most customers.
It is also worth mentioning here that growth in the UAE is expected to remain strong this year.Newest economic insight Tourism in the UAE is also recovering, according to the Middle East report compiled by Oxford Economics, commissioned by ICAEW. After a boost from the World Cup in Qatar, Dubai once again ranked among the world’s busiest international airports, with passenger numbers up 67% year-on-year in the fourth quarter of 2022, the highest since 2019.
back Ramadan, the scenario for the upcoming season will be clearer. But FTAs have long-term implications, so there are ample opportunities for India to have closer commercial cooperation with the UAE in the near future.
[ad_2]
Source link