The ongoing political upheaval in Bangladesh may push the Indian reactive dyes industry into a turmoil for at least six months. Industry experts say that the overall impact of the recent unrest may be significant in some sectors, especially dye stuff.
Nilesh Damani, Vice President, Gujarat Dyestuff Manufacturers Association, told FE, “We are hoping that there may not be any immediate impact as most of our export is halted at our international border with Bangladesh. Furthermore, most of the export already reached to Bangladesh has been paid for in LCs (letter of credit) and bonds. But if the turmoil continues for the coming months, it will put the chemical industry in Gujarat in a very challenging position.”
He also said that the association is regularly in touch with the authorities to access the real time situation. “Gujarat alone exports around 3,500 tonnes to 4,000 tonnes of reactive dyes to Bangladesh per month. This monthly export is worth around Rs 1500 crore. If this demand stops or reduces significantly, the manufacturing units in the state face serious problems because the industry is already struggling with muted international demand.”
He further claimed that industrial clusters like Vatva GIDC in Ahmedabad will be worst hit as around 250 units out of 674 units in Vatva are manufacturing reactive dyes.
According to industry sources, the share of exports to Bangladesh in the overall chemical industry is just around 5% but India is the source of around 30% of the total dye stuff demand in Bangladesh. And 15% of Gujarat’s total reactive dye export goes to Bangladesh.
As per the Niryat data released by the government, in the first three months of FY 2024-25, Indian exports to Bangladesh are worth $ 2.77 billion. If this, organic & inorganic chemicals constitute $ 172 million.
Anurag Singh, Managing Director at Primus Partners, said, “Bangladesh is a minor trade partner as far as chemicals is concerned but the impact may be significant in some areas. It is still not known how the Bangladesh crisis will progress, and how long it will last, hence Indian exporters must mitigate their risks for their exports by taking adequate insurance and safe payment terms.”