Gujarat dyes and intermediates sector sees early signs of demand revival

AHMEDABAD : Gujarat-based manufacturers of dyes and intermediate chemicals are cautiously optimistic about a demand recovery in the coming months, as global supply chain disruptions ease and overseas markets begin to stabilise. Industry representatives note that operating conditions, while still challenging, have improved compared to the pre-festive period.

Capacity Utilisation Improves After Diwali
According to Ankit Patel, Vice-Chairman, Chemexcil, manufacturing units are currently operating at an average capacity utilisation of 55–60%, a marked improvement from below 50% before Diwali. He added that conditions were even more difficult earlier, when utilisation levels hovered around 40–45%, reflecting weak global demand and trade uncertainties.

Textiles and Leather Demand Picks Up
Meanwhile, demand from downstream sectors such as textiles and leather has started to show positive momentum. Patel noted that a resolution of US tariff-related issues could further boost global trade flows. However, he cautioned that ongoing geopolitical tensions continue to weigh on demand from key European markets.

Weak Rupee Boosts Export Competitiveness
Highlighting the export outlook, Bhupendra Patel, Chairman, Chemexcil (Gujarat Region), said the depreciation of the rupee has made imports more expensive but has also improved overall industry sentiment in recent months.

He explained that while tariff challenges persist, the weaker rupee has turned into a “blessing in disguise” for exporters. As a result, Indian dyestuff manufacturers have become more competitive globally, enabling them to offer better pricing and benefit from improved margins amid a strong dollar.

Strong Export Orientation Across Markets
Currently, nearly 60% of dyestuff exports from Gujarat cater to markets such as Europe, Bangladesh, the Middle East, China, Hong Kong, Dubai, Indonesia, and Turkey. This diversified export base continues to support the sector despite short-term trade headwinds.

MSME-Driven Industry with Strong Cluster Base
Gujarat is home to over 3,000 chemical manufacturing units, of which nearly 80% are MSMEs. Over the years, the state has developed robust chemical clusters in regions such as Vatva, Naroda, Vapi, Ankleshwar, and Padra. As reportdd by thetimesofindia.indiatimes.com, companies operating within these clusters supply a wide range of chemical products to international markets, reinforcing Gujarat’s position as a key hub in India’s chemical exports landscape.