For at least six months, the Indian reactive dyes sector may be in disarray due to the current political unrest in Bangladesh. According to industry analysts, the recent upheaval may have had a major overall impact on certain industries, particularly dye goods.
As most of our shipment is stopped at our international border with Bangladesh, we are hopeful that there may not be any immediate impact, according to Nilesh Damani, vice president of the Gujarat Dyestuff Manufacturers Association, who spoke with FE. Moreover, bonds and LCs (letters of credit) have been used to cover the majority of the exports that have already reached Bangladesh. However, the Gujarati chemical sector would face significant challenges if the unrest lasts for the upcoming months.
For at least six months, the Indian reactive dyes sector may be in disarray due to the current political unrest in Bangladesh. According to industry analysts, the recent upheaval may have had a major overall impact in certain industries, particularly dye goods.
As most of our shipment is stopped at our international border with Bangladesh, we are hopeful that there may not be any immediate impact, according to Nilesh Damani, vice president of the Gujarat Dyestuff Manufacturers Association, who spoke with FE. Moreover, bonds and LCs (letters of credit) have been used to cover the majority of the exports that have already reached Bangladesh. However, the Gujarati chemical sector would face significant challenges if the unrest lasts for the upcoming months.
In order to obtain the most up-to-date information, he added, the association maintains continuous contact with the authorities. Every month, between 3,500 and 4,000 tons of reactive dyes are exported from Gujarat alone to Bangladesh. Its monthly export revenue is around Rs 1500 crore. Since the sector is already having difficulty with subdued foreign demand, the manufacturing units in the state would face considerable challenges if this demand quits or dramatically decreases. He went on to say that industrial clusters like Ahmedabad’s Vatva GIDC, where some 250 of the 674 units are involved in the production of reactive dyes, will be particularly hard impacted.
Industry sources state that only around 5% of chemical industry exports are made to Bangladesh; yet, Bangladesh imports over 30% of its dye needs from India. Additionally, Bangladesh receives 15% of Gujarat’s whole export of reactive dyes. Indian exports to Bangladesh are valued at $2.77 billion in the first three months of FY 2024–25, according to government-released Niryat statistics. If this is true, $ 172 million is made up of organic and inorganic compounds.
Bangladesh is a modest chemical trading partner, but there may be considerable effects in some areas, according to Anurag Singh, Managing Director of Primus Partners. Since the duration and course of the Bangladeshi crisis are yet unknown, Indian exporters must reduce the risks associated with their shipments by obtaining sufficient insurance and secure conditions of payment.
