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Textile Industry in UAE: An Emerging Market

By Ananya - 05 Nov 2021 Last Updated: 04 May 2022
Textile Industry in UAE: An Emerging Market

The United Arab Emirates (UAE) has a major textile sector in the Gulf Cooperation Council (GCC), although it is not advertised or marketed. They manufacture items such as child safety seats, curtains, luggage, and even high-end apparel for sale in the local market. Woven items like knitwear, on the other hand, are their best-selling textile.

Textile Manufacturers and Industries in UAE

Textiles have grown to such a size in the country that they now rank second only to oil in terms of revenue and employment. Although the UAE exports to over 50 countries, it also has a sizable home market. The local male consumer has become integral to the success of the high fashion business in cities such as Dubai.

Furthermore, the UAE has attracted a lot of business from other GCC countries, particularly from countries that have relocated their operations to Fujairah, an area in the UAE. Fujairah is a "Freezone," which means that businesses based there are not obligated to pay taxes or repatriation fees. This is one of the primary factors that has attracted many businesses and individuals to the UAE, providing them with a broader market for their clothing and textiles.

The Cloth and Textile Industry of UAE enclose segment Like woven, knitted garment, fabrics, Home Textile, Readymade Cloth and Technical Textile. The Middle East is the fourth largest exporter of fashion and apparel accessories, accounting for over 5.5 percent of global trade. There are around 170 Garment Cloth Manufacturers and Supplier Located in Abu Dhabi, Dubai and Sharjah Region. In recent days, UAE exports cover more than 52 Countries in Asia, Middle East Europe and African Countries. Most Of fashionable luxury apparel clothing has made UAE a hub of Textile Apparel Business in the World. Apparel consumer trends and availability, online Ecommerce shopping has become more popular and expands in Arab countries.

Textile trade, apparel fabric manufacturing, yarn production, and a textile processing mill unit in the UAE will all see significant growth and profitability. Due to favourable government terms and legal policy, textile products can be imported, exported, and re-exported. The Office of Textiles and Apparel (OTEXA) and the Gulf Cooperation Council (GCC) grant special Investment, trade, and manufacturing policy privileges to Gulf Arab countries such as the United Arab Emirates, Kuwait, Qatar, Bahrain, Oman, and Saudi Arabia. On factors such as retail development, production capacity, government business policy, textile market infrastructure, and labour work, the UAE ranks second in the clothing retail industries.

UAE Growth in Textile Market

Favourable economic conditions and trade dynamics have brightened the country's prospects, particularly in the garment and fashion industries. Furthermore, the UAE has become an important centre for the garment and textile industries due to its ever-growing economy. Fibers, fabrics, apparels, material, outerwear, home textiles, and technical textiles are all produced in this Gulf country, which has become a significant textile hub in the world.

The textile sector in the United Arab Emirates is flourishing thanks to government measures like as infrastructural development, tax incentives, and paper transparency. Dubai's designation as a fashion hotspot is the most recent advancement in the fashion frontier. Dubai Design and Fashion Council is being established to achieve this purpose, which will foster creativity and attract domestic and international businesses and designers for various fashion events. Dubai will soon emerge as the new fashion capital, thanks to such strong support and initiatives.

The openness of the market and the establishment of an open economy have also proven to be extremely advantageous to the country. Due to its lack of profit restrictions, competitive labour prices, extremely cheap import tariff, and low corporation taxes, the UAE is an ideal destination for textile and clothing investment. The country's good textile environment is enhanced by the availability of highly skilled and productive labour, a stable economy, and the absence of hidden expenses. Dubai, for example, is a lucrative alternative because it attracts a large number of travellers from all over the world. The government also promotes the expansion and development of small and medium-sized industrial businesses. Increased labour costs, on the other hand, have led to automation in the textile and garment industries. The UAE manufacturers are aiming for and displaying active interest in the development of technological textiles and the provision of novel textile goods. This will help to boost productivity, enhance product quality, and ensure that orders are delivered on time.

Free trade agreements are partly to thank for the UAE's thriving textile and garment industry. The United Arab Emirates joined the World Trade Organization (WTO) in 1996, paving the way for global trade.  Currently, Japan, China, India, Pakistan, Australia, New Zealand, Korea, Brazil, Argentina, Uruguay, and the European Union have free trade zones with the country. The UAE is a good textile and clothing producing destination due to favourable trade agreements with twelve Asian nations, eight European and African countries, and two South American countries.

Changing Consumer buying patter in UAE

  • Technology is extremely important in the life of this generation of consumers. Arab Gen Years expect luxury brands to be online and easily accessible, from Facebook to Instagram.
  • Because of the ease of access, more than 30% of consumers in the GCC region shop online once a month. The GCC is thought to have a good foundation to adapt to the rise of online shopping, with millennials driving the region's connectivity and mobile phone usage.
  • Although the UAE has the world's largest E-commerce sector, there is still a lot of room for expansion in the coming year. According to a study done by MasterCard, at least half of the population shops for things online.
  • This new generation is both internationalists and traditionalists due to their large purchasing power, jet-setting lifestyle, and tech-savvy habits. While they buy and travel throughout the world, their cultural and religious values are deeply rooted in a lengthy tradition of customs passed down from generation to generation.

Dubai Textile Souk

The Dubai Textile Souk, also known as the Old Textile Souk, is a traditional textile souq (market) located along the Dubai Creek in Dubai's old Bur Dubai neighbourhood. Opposite to the textile souk on the other side of the Dubai Creek lie the Dubai Spice Souk and Dubai Gold Souk in Deira, accessible via the creek by special abra boats.   Dubai's souks have a long history of trading in the Persian Gulf region, and they've evolved over time as the city has grown. It has long been a commercial centre for the interchange of textiles, whether for practical purposes such as sewing clothes or for special occasions.  Vendors present the finest textiles, silks, and designs from around the world, sure to transform or enliven any wardrobe. It's also simple to locate a qualified tailor who can create any form of outfit from your preferred fabric.

Due to the enormous number of Indian and Pakistani traders that have moved in the Bur Dubai and Dubai Creek neighbourhood, where the Dubai Textile Market is located, the region has a major Indian and Pakistani influence. This has resulted in the formation of ‘Hindi Lane,' a collection of small Indian stores selling bindis, bangles, flowers, saris, and other religious things. Other major portions of the textile souk, such as Al Fahidi Street, have a strong Indian influence, with sellers mostly selling Indian clothing, shoes, and jewellery. Similarly, Pakistani influence can be seen in the sale of pashminas, a traditional Pakistani garment, and salwar kameez, a traditional Pakistani dress.

Conclusion

The UAE countries are a viable hub for all types of textiles and apparel due to the availability of trained labour, good government initiatives, utilisation of cutting-edge technology, supporting trade agreements, consumers with high disposable budgets, and a lack of hidden expenses and red tape. This country has favourable equations in all of the important aspects for a textile or clothing sector to function and run efficiently.

From luxury and designer clothing to home textiles, technical textiles to readymade garments, the UAE has a vast choice of textile products to offer. In the field of textiles, this oil-producing country is putting its best foot forward and making strides forward.

Dhanguard provides the business setup and company formation services in Dubai, UAE with the guidance of our professional team of consultants. Faster and hassle-free company setup in Mainland and Freezone in UAE.

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