Turkey, India and Egypt take centre stage at DIFLEX 2023

Sajjad Ahmad, Deputy Business Editor

Footwear and leather goods exporters on Monday said that the Middle East and North Africa (MENA) offers a robust growth opportunity for the trade with retail spending power estimated to be surging in the range of 6-8 per cent CAGR across the region with the UAE and Saudi Arabia leading the trend.

Speaking at a press conference on the opening day of the region’s largest footwear and leather goods show – DIFLEX 2023- senior officials representing some of the global leather hubs – Egypt, India and Turkey - said the growth potential of MENA is amplified in the light of the data by Statista that non-food retail sales in the GCC alone is estimated to reach over $150 billion by 2026. “MENA markets offer sunrise opportunities to leather producers and manufacturers with a rising population - 55 per cent under the age of 30 - offering a significant demographic dividend to both domestic and export businesses. Coupled with this is the increasing e-commerce spends and new fintech solutions like Buy Now Pay Later (BNPL) reshaping the consumer behaviour and making consumption and access to goods easier than before” said Sanjay Leekha, Chairman, Council for Leather Exports, a Government of India statutory trade body under the Ministry of Commerce and Trade.

India, which is the second largest exporter of leather garments and fourth largest in leather goods globally had clocked $5.2 billion in 2022-23 fiscal. Over 60 top Indian footwear and leather goods manufacturers are taking part in DIFLEX 2023-during December 11-13 at the Festival   Arena in Dubai Festival City.

The CEPA effect: The UAE is a major driving force in enhancing trade with ramifications across the region with the country signing Comprehensive Economic Partnership Agreement (CEPA) with various countries enabling tariff-free access of goods including for footwear and leather goods.

“Being a major trading and re-export hub in the region, CEPAs catalyse trade in general and with concomitant value chain impact across MENA. For leather producers, this translates to ease of entry particularly in the wake of the rising trend of non-tariff trade barriers in western export destinations,” said Leekha citing the new EU regulation on Forest Degradation Free supply chain that will add to the compliance costs of exporters.

India is also in negotiations with the US, the largest importing country for Indian footwear and leather goods to reinstate US GSP programme which expired in December 2020. The expiry of the trade preference programme has affected Indian exports to the tune of$450 million per annum.

India was the first country to enter into CEPA with the UAE, followed by Israel, Indonesia and Turkey, with more countries in the pipeline.  Bilateral non-oil trade between India and the UAE post-CEPA has already touched $50.5 billion as of April 2023, with the target being $100 billion by 2030. Under the CEPA regime, bilateral non-oil trade with Israel is expected to touch $10 billion in five years while with Indonesia and Turkey $10 billion and $40 billion respectively.

Reinforcing the potential of the market, Eng. Mahmoud Sarg, Chairman, Leather Export Council of Egypt, Ministry of Trade and Industry said that MENA economic growth is expected to accelerate in 2024 as per the International Monetary Fund (IMF) which will bring in significant boost to trade in general.

“DIFLEX 2023 is a unique vantage point for growth for footwear and leather good exporters and as it is being held in a regional growth context, it is an opportunity to foster partnerships and forge new market entry strategies into MENA while e-commerce and consumer spending scaling new heights,” said Jeen Joshua, Managing Director of Verifair, organisers of the event.

Over 250 top notch footwear, leather and leather accessories producers from across the world are participating at this one-of-its-kind event, showcasing over 10,000 product lines. Manufacturers and Producers at DIFLEX are from the leading footwear and leather producing hubs of Turkey, Egypt, India, Sri Lanka, China and the UAE.  Turkey, India and Egypt will have official country pavilions at the show.