India-UAE Trade Targets $200 Billion Goal while Tiruppur Knitwear Hub Struggles with Cost Squeezes

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Bilateral trade between India and the United Arab Emirates is expanding rapidly toward a $200 billion target by 2032, bolstered by CEPA, strong investment linkages, and over 200,000 Indian businesses operating in the UAE. With bilateral trade already reaching $101 billion and $30 billion in cumulative investments, expanding state-level engagements and BRICS participation are set to unlock fresh opportunities for startups and trade corridors. Conversely, India’s primary knitwear hub in Tiruppur, responsible for over 50% of the country’s apparel exports, is facing a severe margin squeeze despite a surge in orders following the lifting of high US tariffs. Exporters are struggling with a 15–20% spike in yarn prices, surging cotton costs, and a 30% acute migrant labour shortage, forcing MSMEs to operate at only 60–70% capacity. To safeguard their single-digit margins and maintain competitive advantages against nations like Bangladesh and Vietnam, Tiruppur exporters are urging the Union Government to regulate monthly cotton pricing, grant a five-year customs duty exemption on raw cotton, and subsidize worker housing.

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