India Dyes and Pigments Market Outlook to 2028

India Dyes and Pigments Market Overview

In 2023, the India dyes and pigments market reached a valuation of USD 66 billion. The market is primarily driven by the country's strong textile industry, which contributes 2% to India's GDP. Additionally, rising demand for automotive coatings and industrial applications has bolstered growth. Factors like increasing exports of Indian textiles and expanding domestic production capacity have further fueled the market.

Prominent players in Indias dyes and pigments market include Atul Ltd., Kiri Industries Ltd., Bodal Chemicals Ltd., Clariant Chemicals India Ltd., and Akshar Chem India Ltd. These companies are leaders due to their wide product range, extensive distribution networks, and significant production capacities. Their presence is vital in catering to both domestic and export demands.

The Indian Ministry of Textiles launched the Production Linked Incentive (PLI) scheme in 2021 to promote large-scale manufacturing in textiles and related sectors. This initiative includes incentives for dyes and pigments manufacturers who focus on reducing their environmental footprint. An allocation of INR 10,683 crore was set aside for the scheme, which also aims at boosting exports of textiles and dyes to global markets like the U.S. and Europe.

The cities of Ahmedabad, Vadodara, and Mumbai dominate Indias dyes and pigments market. Ahmedabad and Vadodara in Gujarat are hubs due to the presence of major manufacturing facilities and easy access to raw materials like chemicals. Mumbai serves as a major commercial center, with strong financial backing and an extensive export network.

India Dyes and Pigments Market Segmentation

By Product Type: Indias dyes and pigments market is segmented by product type into Acid Dyes, Reactive Dyes, Direct Dyes, and Vat Dyes. In 2023, Reactive Dyes held the largest market share due to their widespread application in the textile industry. Reactive dyes have a high fixation rate with cotton and are preferred for their bright, vibrant colors. The increasing demand for colored textiles in fashion and home textiles has further bolstered the demand for this segment.

Product Type

Market Share (2023)

Reactive Dyes

45%

Acid Dyes

25%

Direct Dyes

20%

Vat Dyes

10%

By Application: The market is segmented by application into Textile, Automotive Coatings, and Industrial Applications. In 2023, the Textile segment dominated with the largest market share due to Indias robust textile industry, which contributes over USD 150 billion to the countrys economy. The application of dyes in textile manufacturing is indispensable, with the demand for vibrant and colorfast fabrics driving the use of dyes. This segments growth is further reinforced by rising exports of textiles to Europe and the Middle East.

Application

Market Share (2023)

Textile

60%

Automotive Coatings

25%

Industrial Applications

15%

By Region: Indias dyes and pigments market is divided into four key regions: North, South, East, and West. In 2023, the West region, including Gujarat and Maharashtra, held the dominant market share, largely due to the presence of significant manufacturing hubs and raw material suppliers in Gujarat. This regions well-established chemical industry and easy access to ports have made it the epicenter of production and exports of dyes and pigments.

Region

Market Share (2023)

West

50%

South

20%

North

20%

East

10%

India Dyes and Pigments Market Competitive Landscape

Company Name

Establishment Year

Headquarters

Atul Ltd.

1947

Gujarat, India

Kiri Industries Ltd.

1998

Ahmedabad, India

Bodal Chemicals Ltd.

1986

Gujarat, India

Clariant Chemicals India

1956

Navi Mumbai, India

Akshar Chem India Ltd.

1989

Gujarat, India

Atul Ltd.: In 2023, Atul Ltd. inaugurated a state-of-the-art specialty dyes facility in Gujarat, valued at INR 600 crore. This move is aimed at increasing production by 15,000 metric tons annually to meet rising domestic and global demand. The facility also emphasizes sustainable manufacturing practices, aligning with Atul's commitment to environmental sustainability and reducing carbon emissions in dye production.

Bodal Chemicals Ltd.: In early 2024, Bodal Chemicals announced an investment of INR 350 crore to expand its pigment production facility in Vadodara. The expansion, expected to be completed by Q4 2024, aims to cater to the increasing demand for high-performance pigments used in automotive coatings and industrial applications. This investment also reflects Bodal's strategic focus on enhancing export capabilities.

Growth Drivers

Rising Export Demand for Textiles and Dyes: A significant driver in the Indian dyes and pigments market is the increased global demand for Indian textiles. In 2023, Indias textile exports stood at USD 44.4 billion, with a substantial portion of this value being dependent on the use of dyes and pigments. Countries like the U.S., Germany, and the U.K. are key export destinations. The Indian governments push to enhance exports via schemes like the RoD TEP (Remission of Duties and Taxes on Exported Products), introduced in 2021, is further fueling this demand.

Expanding Automotive Sector: India's automotive sector continues to drive the demand for specialty pigments used in coatings and paints. The shift toward electric vehicles (EVs) is further boosting the demand for high-performance pigments that provide durability and aesthetic appeal. India is the world's 4th largest automotive market and the 7th largest manufacturer of commercial vehicles in 2022.

Sustainability Mandates and Eco- Friendly Dyes: With increasing global awareness about environmental issues, the Central Pollution Control Board (CPCB) has enforced stricter guidelines in 2023 regarding effluent discharge from dye manufacturing plants. This has pushed companies to adopt greener practices. Consequently, there is a rising demand for biodegradable and low-water-consuming dyes, especially among textile manufacturers. Leading Indian companies, like Kiri Industries, are investing heavily in R&D to develop sustainable dye alternatives.

Challenges

Stringent Environmental Regulations: Indias stringent environmental laws, particularly the Hazardous and Other Wastes (Management and Transboundary Movement) Rule pose a challenge for dye manufacturers. The increased scrutiny on waste management, chemical effluent discharge, and air pollution has led to a surge in operational costs for companies. Compliance with regulations like the ZLD (Zero Liquid Discharge) has led to companies incurring significant capital expenditure, limiting profitability, particularly for small- and medium-sized enterprises.

Volatility in Raw Material Prices: The Indian dyes and pigments market heavily depends on petrochemical derivatives, the prices of which are highly volatile. In 2023, crude oil prices surged per barrel due to geopolitical tensions and supply chain disruptions. This volatility directly impacts the cost of manufacturing dyes and pigments, as key raw materials like benzene and toluene are derived from crude oil. Companies are forced to either absorb these rising costs or pass them onto consumers, impacting market stability.

Government Initiatives

Production Linked Incentive (PLI) Scheme for Textiles: Launched in 2023, the PLI scheme for the textiles sector has incentivized the manufacturing of man-made fibers, technical textiles, and dyes and pigments used in these industries. The government allocated INR 10,683 crore towards the scheme, with a special focus on enhancing domestic production capabilities for eco-friendly and sustainable dye products. This initiative is set to significantly boost domestic production while reducing reliance on imports, thus promoting local industries.

Gujarat Industrial Development Corporation (GIDC) Support: In 2023, the GIDC announced plans to develop a special chemical zone in the Dahej Industrial Estate, specifically aimed at boosting the production capacity of dyes and pigments manufacturers. The government has earmarked INR 1,200 crore for infrastructure development in this zone, providing manufacturers with access to essential utilities like water, power, and logistics. This initiative will create a conducive environment for companies to scale up operations, contributing to the markets overall growth.

India Dyes and Pigments Market Future Outlook

The future outlook for the India dyes and pigments market shows steady growth, driven by increasing demand from the textiles, automotive, and construction industries. With government initiatives supporting local manufacturing and sustainability efforts, the market is expected to expand, particularly with the rising focus on eco-friendly and high-performance products.

Future Trends

Expansion of Eco- Friendly Dye Production: By 2028, the production of eco-friendly dyes is expected to dominate the market, driven by stringent environmental regulations in both domestic and export markets. Indian manufacturers will focus on developing bio-based and water-saving dyes to cater to global sustainability demands. This shift is anticipated to increase by 50%, as large textile players and automotive sectors worldwide look for sustainable alternatives. The Indian government is expected to implement stricter policies to ensure compliance, further propelling this trend.

Technological Integration in Manufacturing: The dyes and pigments industry in India is expected to see a significant shift towards automation and digitalization by 2028. Manufacturers will increasingly adopt Industry 4.0 technologies like AI-based process control, robotics, and IoT to enhance production efficiency and product quality. This shift is likely to reduce production costs while improving the sustainability of the manufacturing process. Companies are expected to invest heavily in upgrading their production lines to meet international standards.
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