Surat’s textile sector, presently grappling with a slowdown amid climbing crude oil and raw material costs, could secure a fresh pathway towards international markets via Dubai.
A senior delegation from the Dubai government visited Surat and convened with more than 450 leading mill owners.
The delegation set out offers covering business establishment in Dubai and expansion into worldwide markets.
Under the proposal presented to the sector, businesses could establish units or offices near the airport, with access to land at competitive rates alongside supporting infrastructure.
The chief attraction, according to both the delegation and industry figures, lies in Dubai’s trade access into international markets.
Whilst exports from India towards markets such as the US can attract import duties reaching up to 18%, goods dispatched via Dubai could reach several international markets duty-free under applicable trade agreements, potentially rendering Surat’s textiles more competitive.
The Dubai delegation furnished Surat industrialists with a comprehensive presentation covering business establishment within the emirate.
It stated facilities would stand available for non-polluting businesses and trading units. Surat entrepreneurs would be able to establish operations via a single-window system, with land, ready-to-use office spaces and the requisite government approvals available at competitive rates.
The Dubai government likewise signalled that special concessions on rates could be weighed for the Surat association through further discussions, should this prove necessary.
Jitu Vakharia, President of the South Gujarat Textile Processors Association, said discussions with the Dubai government had recently taken place and that several Indian businesses were already reaping benefits from operating there.
He pointed towards Indian companies such as Ashok Leyland as examples of businesses that have established plants in Dubai and expanded successfully.
Vakharia said the opportunity could help Surat’s textile businesses reach international buyers more directly whilst gaining a firmer foothold within global markets.
On whether textile processing mills could relocate to Dubai, Vakharia said this was unlikely given that processing units are generally linked with pollution and would need to comply with water and air pollution regulations.
However, he said Surat-based textile manufacturers and exporters, alongside traders who currently find exporting difficult, could open offices in Dubai and expand their businesses.
This could hand Surat’s textile industry a fresh global trading hub, allowing businesses to connect directly with overseas buyers.
Surat’s textile mills hold production capacity exceeding local market demand, frequently resulting in excess stock.
Vakharia said the industry presently produces around 15% to 20% more than the local market can absorb.
He said exporting this surplus via Dubai and identifying new markets beyond India could help tackle the problem.
“If the plan works properly, it could provide a major boost to Surat’s textile industry,” he said.
“Vakharia also spotlighted Dubai’s tax system as a further potential advantage for Indian businesses,” Bhaskar reported.
He said, according to information shared with the association, businesses would face a fixed 5% tax, with no additional income tax under the arrangement presently being discussed.
