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The Impact Of Crackdown On Chinese Dye Industry

Vandita Jadeja

7/11/2018

China’s decision to shutter numerous chemical manufacturing units in order to control the air pollution and protect the environment has helped the Indian chemical industry grow. The exports have grown 31.94% to $15.91 billion in 2017-18. The chemical industry in India has revived and the huge volume of exports has resulted in a shortage for domestic consumption. The exports have increased in value and in volume and this trend is expected to continue for the coming two to three years.
 
There was a period when India was once heavily de- pendent on China for the raw materials and these raw ma- terials are now exported by the country. With a shutdown of manufacturing industries in China, the dye makers are sourcing the raw materials from India. Maharashtra and Gujarat are the two largest manufacturers of dye intermediates in the country and this is a period to encash and see where the industry reaches. It is a good opportunity for the manufacturers to build confidence in the buyers. The Chinese dye industry is expected to bounce back in three years. The growth last year was significant and the exports rose to $12.06 billion. It is expected to reach new milestones this year.
 
However, due to the increasing exports, there is a huge shortage of chemicals in the country. About 150 factories in the Delhi-NCR region are badly hit due to the ban on furnace oil and pet coke which form the main constituents of the dying process. This has resulted in sourcing problems for brands like GAP, Zara, Old Navy, Marks and Spencer and H&M. The Chinese import has precipitated the shortage of dyes. It is the peak season with orders pouring in from the international markets for spring 2019. Unable to meet the demand, the manufacturers have decided to scale down the operations. India is a major sourcing centre for textile dyes and major brands like Ikea and H&M have been sourcing the dyes from India for many decades. Marks & Spencer has also been sourcing dyes from India.


 

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