With the objective of protecting, promoting and consolidating the position of dyestuff industry in Gujarat and the rest of the country, Gujarat Dyestuffs Manufacturers Association (GDMA) was established in the year 1962. Our mission and vision is to take the dyestuff industry and our members to the pinnacle of success imbibing cherished '3 Vs' - “Vision, Values and Vitality” in their operations so as to enable them to modernise their manufacturing base. We are committed to achieve maximisation of production, productivity and profitability, enhancement of productive employment opportunities and increase of exports to new markets with larger volumes & new products to stay ahead of others and strengthen business operations in the key geographies of developed countries.

2. How is India's dyestuff industry doing presently?

India accounts for approximately 6% of the world production of the dye industry. Our sector is exporting nearly 50% of the domestic production, amounting to Rs. 51010 million in the year 2004-05 leveraged by a growth rate of 15% and increased commendably in the year 2005-06. We have emerged as a major foreign exchange earner for Indian economy. The industry comprises around 900 small-scale units and 50 large organized units producing approximately 80000 tons of dyestuff annually.

The dyestuff sector can be termed as one of the important segments of the chemicals industry in India, having linkages with a variety of sectors like textiles, leather, paper, plastics, printing inks and foodstuffs. The rapid and sustained growth of the dyes and dye intermediates sector has brought about vibrant growth of textile and chemical industries in the country and is playing a vital role in catering to the requirements of the world at large.

3. Gujarat State in particular has always stood out as the major dye exporter centre of India, what are the reasons behind this?

Gujarat is fast emerging as a chemical state on the industrial firmament of the country. The State accounts for 25% of the production of chemicals in the country and dyestuff accounts for 80% of the units, generating a turnover of Rs. 3200 crore during 2004-05.

The proven capability of chemical process development, large installed production capacity, technical manpower, infrastructure, testing facility, export-import contribution and other competitive edge factors have been demonstrated and are the major strength of the dyestuff industry in Gujarat. The State can scale greater heights with the addition of new capacities and their prompt utilisation.

4. China is supplying lot of dyes & dyestuff to Indian companies. What do you think are the reasons for Indian companies importing dyes from China instead of using the local brands?

China, the closest rival of India in the dyestuff industry sector, has built up huge capacities over the years with more competitive price but poor quality products. Higher duties and tax, high production cost of the local brands has led Indian companies to import dyes from China. Indian companies import dyes from China under the advanced license scheme, ``that allows duty exemption for goods imported for carrying out export orders. Further, custom duty on dye and dyestuff is 12.5%, while excise on the same is 16.5%, which makes imported dyes attractive for the textile companies. Chinese dyes are cheaper by 25% than the dyes produced in Gujarat.

Also, the higher tax and electricity rates, strict environment laws, sales tax and value added tax (Vat) fuelled the production cost of the local units. This has made the going tough for many dyestuff units in Gujarat. The major issues of concern over the last few years are low demand growth, falling margins and profitability due to higher burden of taxation, cut throat competition and rising value of $, decline in the growth rate, over capacity, uneconomic size of the units high cost of raw material powerful cost and growing environmental concerns.

5. What steps do you feel that the Indian Government should take to ensure the well-being and growth of the dye industry?

In order to enable dyestuff industry to capture greater market share and explore new markets and products both within domestic and international markets, immediate and effective steps on the following lines should be taken by the Government on priority basis:

(a) Cost of raw materials, power & fuel, taxes and duties should be brought down as per the International levels followed in other countries.

(b) The debilitating cost of infrastructure which varies between 15 to 23% of the export price should be reduced through speedy modernisation of necessary infrastructure by attracting FDI on BOT basis.

(c) Cost of borrowing including interest on export credit is high, which needs to be corrected.

(d) Crippling labour laws coupled with inflexibility of the labour market has resulted in high cost of labour. Labour reforms should be undertaken urgently to spur domestic and export growth.

(e) Since industrial effluent cannot be treated as per present norms, it should be allowed to be mixed up with city sewage so that industries are attracted by sewage norms which are practically achievable. This is the practice followed all over the world.

Factors like lack of competitiveness, modernisation, innovation and reinventing of marketing strategy, etc. have been hampering the full fledged growth and development of the dyestuff industry in India. It is imperative for the Government to develop new strategies and adopt new as well as the aforementioned approaches so that the entire gamut of dyestuff industry forges ahead of other competitors in the international market.

6. Which countries do you feel can be targeted for exporting dyestuffs from India?

The major markets for Indian dyestuffs are the EU, USA, Hong Kong, South Korea and Europe. Indian dyestuff industry is exporting nearly 50% of the domestic production with the USA accounting for 20% of India’s exports. However, we don't want to restrict ourselves to few countries for our export growth. The unprecedented challenges and opportunities which lie ahead require us to be more proactive and responsible to the ever changing business functions and practices so that we can adjust to the forces of transformation which are taking place speedily. If we implement effective strategies and approaches in this sector, we can surely make the world our playground.