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'Retain customs duty on dyestuffs at current levels'

By Sandeep
March 07, 2012 13:44 IST
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Today, the global market of dyestuffs, pigments and intermediates is around USD 25.85 billion with dyestuffs and pigments market is approximately around USD 17.88 billion and the intermediates is about USD 7.98 Billion. India's share in the global market is about 8 to 9 per cent. China is the largest manufacturer of dyes followed by India.

Industry expectations

The industry expects 0 per cent duty on all types of fuels, low duty rate of 2 per cent on basic building blocks like benzene, toluene, xylene, naphthalene etc.; moderate duty rate on Intermediates of 5 per cent and high duty rate on finished products of 7.5 per cent.

This will encourage our industry to export value added finished products and import only basic products of low value.

Also, we expect clear cut guidelines be laid down to complete the procedures and formalities regarding refund of excise duty to exporters within a strict time frame including provision for payment of interest on late refunds.

The industry expects that the import duties on dyestuff should be at least retained to the present level to enable them to compete with the imported products.

Industry expects reinstatement of the exemption scheme, which has provided concessional rate of 60 per cent of the normal rate of Central Excise Duty (CED) with Cenvat credit unto clearances of Rs 1 crore (now withdrawn).

The slab of the first clearance value of Rs 1 crore (Rs 10 million) may be increased to Rs 2.50 crore (Rs 25 million). Also, for eligibility criteria, aggregate of value of Rs 4 crore (Rs 40 million) in the previous financial year should be increased to Rs 5 crore (Rs 50 million).


industry expects corporate income tax to be reduced to max. 30 per cent and there should be no other surcharge and cess. Income Tax for individuals and others to be reduced to 25 per cent max.

Analyst/Market expectations

Dyes and pigment sector is likely to be largely sidelined by the Union Budget 2012-13.

Stocks to watch

Atul, Sudarshan Chemicals, Kiri Industries


Global dyes industry would grow at around 4 per cent. Developed   economies are expected to show slower rate of growth in consumption, especially in Europe and USA. However, the consumption in developing economies like China and India is expected to show a faster growth rate of 6.5 per cent to 7 per cent.

Presently India, China, Korea, Taiwan and Indonesia are the main Producer for the Dyestuffs and Pigments. Manufacturers in Europe and US have almost shifted the production base to these Asian Countries. The main reason for this is the low cost of production and ample manpower within Asian Country.

Dyestuff Industry is mainly depending on the textile industry and presently most of the Asian Countries are encouraging their textile business, which used to be a core business once upon a time.

Including India lot of incentives have been provided to the textile industries and presently all these textiles are being exported to Europe, USA and other Western Countries.  So, definitely with the improved textile industry, Dyestuff Industry is bound to grow.

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