Published on August 2, 2017
After the implementation of GST dyes and pigment sector is witnessing shortage of supply. Organized players in the industry will get benefit from the transition as around half the sector’s turnover comes from unorganized players.
Most of the mid-size manufacturers have curtailed their overall production and in some cases stopped the process, and are unlikely to revive it before second week of July. In the B2B segment, some of the manufacturers have given directives to industrial clients to place orders after third week of July when their systems are expected to be in place for GST.
For most of the products of dyes, surface coatings, varnishes and pigments segment GST rates are at 18 percent. In UP, the pre-GST rate was about 17.5 percent (12.5 percent excise and 5 percent VAT) and in Gujarat it was 18.125 percent.
As per source, the Indian dyes and pigments industry has benefited from the China opportunity. Increased compliance for environmental norms had led to closure of various chemical manufacturing facilities in China, leading to reduced supply and opportunities for the Indian manufacturers.
So this means that Indian organized market players are having lots of opportunities due to China’s transformation and Indian players having an established capacity and environmental compliance which can meet the demand requirement. With all the good opportunities for organized player’s upcoming outlook will be abundant.