Domestic rates of chemicals used for dye manufacturing have zoomed up on falling Chinese exports, creating a cost pressure for dyestuff makers, and as a ripple effect, hurting the textile industry.

Essential chemicals such as vinyl sulphone, hydraulic acid and naphthalene have seen a sudden increase in prices, jacking up rates of reactive dyes by around 200 per cent.

Price rise

Black B dye now sells at ₹550/kg, up from ₹180 six months ago. H-Acid, an amorphous dye intermediary, now costs ₹1,800/kg compared to ₹300 a year ago.

Dye intermediates are in short supply in the country, following gradual closure of polluting dyeing units in Maharashtra and Gujarat, the two major producing States. In Tamil Nadu, the State pollution control board shut down a large cluster that polluted the Noyyal river in Tirupur.

“The pollution norms are too stringent for small units,” says CK Singhania, Vice-President of Dyestuffs Manufacturers’ Association of India, adding that the chief exporter China’s crackdown on polluting factories will further narrow supply to India.

According to data from Directorate General of Commercial Intelligence and Statistics, India imported ₹9,097 crore of dyeing and colouring agents during fiscal year 2014, up from ₹7,893 crore in the previous fiscal.

Inherent advantage

A Shakthivel, President of Tirupur Exporters Association, in a letter to Finance Minister Arun Jaitley on Monday, said garment exporters cannot pass on the cost increase in a highly competitive global market. “Our competitors Bangladesh, Vietnam and Pakistan have inherent advantages in bank interest rates, power costs and Government support schemes,” he wrote.

The closure of polluting units can also hurt a burgeoning dyestuff export sector, earning $4.5 billion in revenue every year, says Janak Mehta, President of Dyestuffs Manufacturers’ Association of India. The industry has requested the Central Pollution Control Board to conduct realistic Environment Impact Assessment studies, instead of adopting western standards in the country.

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