Three months after Pakistan suspended bilateral trade with India, dyestuff manufacturers in Gujarat have started feeling the heat after 1,000 metric tonne (MT) of monthly exports to the neighbour came to a standstill.
“The growth has slowed down. When one market which accounted for 18 per cent of the exports shuts down, then effect will be surely be felt in the longer run, especially in the second half of the financial year,” Ajay Kadakia, chairman of CHEMEXCIL (Basic chemicals, cosmetics and dyes export promotion council), — an organisation set up by the Union Ministry of Commerce and Industry — told The Indian Express on the sidelines of 9th Asia International Dye Industry, Pigments and Textile Chemicals Exhibition at Gujarat University Convention centre where 50 Chinese companies are participating.
The growth of dyestuff goods that was around 18-20 per cent every year, has slowed down to six per cent in September 2019. “Though the effect of Pakistan suspending trade is yet to show, we will have a negative impact in the past six months of the year… There is an impact… Because of Pakistan closing down, we are under pressure. They are now trying to import from China. There are dyestuff industries in Taiwan, Thailand, Indonesia and South Korea,” he said.
According to CHEMEXCIL chief, Gujarat has been hit hard as it used to export reactive dyes which was used in the textile industry in Pakistan. “Most of the reactive dyes used to be imported from Gujarat. Every month 1,000 metric tonne used to be exported,” he said.
When asked if any representation from Gujarat or CHEMEXCIL was made to the Indian government to end the impasse, Kadakia said, “We cannot do anything because it was for Pakistan to open trade. It is in a tussle with the Indian government… But Pakistanis used to benefit out of imports from India. Compared to other destinations, Ahmedabad is a stone’s throw away from Attari border from where the consignments used to go to Faisalabad. Their transport costs were minimum and once they ordered, the consignments from India used to reach them within five to seven days.” Apart from Faisalabad, dyes from Gujarat also went to other textile hubs in Lahore and Karachi.
Gujarat has an estimated 1,100 units producing dyestuff of which 90 per cent of them produce reactive dyes while the rest produce pigments and some other basic dyes. “Apart from Pakistan, we also export reactive dyes to countries such as Bangladesh, Turkey and Indonesia,” he added.
According to the official, Pakistan suspended trade with India in reponse to India’s move to end special status to Jammu and Kashmir. After the Pulwama terrorist attack, India revoked Pakistan’s most favoured nation (MFN) status and imposed up to 200 percent duty on import of Pakistani goods. The President of Gujarat Dyestuff Manufacturers Association, Yogesh Parikh said there has not been any cut in production or job losses despite Pakistan stopping imports of reactive dyes. “The exports to Pakistan were stopped in August after Article 370 was removed from Jammu and Kashmir. It has affected our growth, but there is yet no cut in production or job losses,” he said.