Exporting Reactive Turquoise.........
HS Code : 320416
India is popular for textiles. Even those that come in bright-colours. It is not a surprise therefore that India is one of the largest producers and exporters of reactive dyes that give fabrics their many hues. What makes India a clear exports leader in this segment?
India’s association with colour and dyes is well-known and date back centuries. While cotton was discovered in India around 6000 BC, the trace of natural dyes that were used to colour the fabric goes back roughly to 1200 BC. Come today, and India has grown to become one of the largest exporters in the world, of both cotton apparels and reactive dyes that give them their vibrant colours!
The global market for dyes (including pigments and dye intermediates) is at present worth around $23 billion – while the dyes and pigment market is valued at $16 billion, dye intermediates market is worth about $7 billion. Dyes are of various kinds – from direct dyes and disperse dyes to reactive dyes – but it is the reactive dyes segment where India has really taken giant strides when it comes to exports.
The reactive dyes segment is one of the fastest growing segments of dyes across the globe, with the Indian reactive dyes market growing rapidly at a CAGR (compound annual growth rate) of 4.3% over the last few years. In fact, the paint and dye industry has been an important contributor to India’s exports basket, with export of reactive dyes growing at a decent pace. In FY2017 the exports of reactive dyes [HS Code 320416] increased 5.93% y-o-y, to $565.97 million from $534.28 million in FY2016.
Reactive dyes are popularly used in tanning industry as they possess the property to attach to a fabric and hence give a richer and stronger colour to the fabric on which they are applied. In fact, they are the most commonly used dyes for colouring cotton fabrics. And, not to say the growth of textiles and apparels sector is further helping the industry.
Reactive dyes are available in several varieties and types such as Mild Exhaust (ME) as well in a broad range of colours – orange, brown, blue, green, violet, yellow, red, black, etc., with the most popular in exports being blacks, blues and reds which contributed $226.50 million, $126.62 million and $96.76 million respectively to India’s exports in FY2016.
"Indian reactive dyes market has been growing at a CAGR of 4.3%"
The exports from the industry has witnessed a remarkable growth over the last few years, with exports of reactive dyes reaching a whopping $565.97 million in FY2017. In fact, between FY2013 and FY2017, exports reported a jump of 53.7%. In FY2015, exports had touched $643.60 million mark. But, it dropped to $534.26 million in FY2016. According to exporters, the poor performance was because of the changes in the business environment and a drop in prices of the product, globally. Hence, in FY2016, while exports volume went up 7% y-o-y, value of exports dropped 17% y-o-y.
Exports of reactive dyes has been constantly growing over the last few years. The growth, although not rapid, has been steady. And that is a good thing
Further, the product category has been very successful in penetrating into India’s non-traditional exports markets. Last year, India managed to export reactive dyes to about 90 countries. While exports to Turkey, Bangladesh, Thailand, Singapore and Pakistan made up 52.59% of the total exports, exports to Americas constituted an alluring 19.11% share, with Honduras, Brazil and Mexico being the largest markets of Indian dyes.
Although India has achieved a great deal in this product category, the battle is only half won. India’s presence in US and Europe, the two largest markets for reactive dyes, is still quite negligible. In FY2017, Indian exports to US and EU were $9.16 million and $52.02 million, respectively, which is only 10.81% of India’s total exports of the product.
To Export, such products in EU one needs certification of – like Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) – by EU authorities. Which could be done via https://echa.europa.eu/regulations/reach/understanding-reach
REACH requires importers/buyers to get the product tested, but the practice has been the reverse. “Interestingly, Indian exporters are paying for the test from their pocket as they live under a constant fear of losing the market share, on the positive side, the government has been very helpful. It provides financial assistance of 50% of the cost of getting a lab test done.
"Dye exporters receive a 3% benefit under the MEIS scheme of FTP"(Kindly read latest Foreign Trade Policy from www.dgft.gov.in)
Despite a few challenges, exports of reactive dyes remain a lucrative business. While global demand for reactive dyes is growing, there are many markets that remain untapped. Exporters of reactive dyes too feel that both old and new companies must step in with innovative ideas to increase production – which will also boost competitiveness. No doubt, the opportunity is huge. And with a stable growth rate, a leadership position, and several untapped markets, Indian exporters of dyes seem well-poised to reap benefits of this vibrant market.