Colourful future for Gujarat’s chemicals & dyestuff industry

Gujarat’s chemicals and dyestuff industry is upbeat these days following the Chinese government’s decision to withdraw export rebates for 2,500 of its products. This would result in virtually no rebate for Chinese chemicals and intermediates, giving the state chemical industry, constituting about 12,000 units and accounting for 70% of India’s output, a reason to cheer.

The move is expected to make these units competitive both in the domestic and export markets. These units produce chemicals and dyes worth Rs 18,000 crore a year and provide employment to around 6 lakh people. The Chinese government’s decision to withdraw 13% export rebate has made chemicals like aniline, sodium bicarbonate, sodium nitrate, and other chemicals derivatives costlier by 10 to 15% from this month.

This has made Indian exports relatively cheaper in global markets. Big players like Clariant have already announced price hikes ranging from 5% to 30%. But the price rise in chemicals like benzene, naphthalene and their derivatives is not good news for consumption industries like textiles, paper, paints and pigments.