Increased Dumping from China-Impacting Gujarat’s Chemical Industry

 Gujarat has a strong industrial base in chemicals and petrochemicals industries. During 2014-15, state accounted for about 36% share in country’s chemical production and 18% share in the exports of chemicals from India. Gujarat’s contribution to the national production is huge in soda ash, dyes and intermediate, salt and petrochemical segment as it accounted for over 90% share in India’s soda ash production, over 80% share in dyes & intermediate production, over 65% share in salt production and over 60% share in petrochemical segment. Gujarat holds about 11,000 chemical units, out of which 6,376 are micro units, 1,933 are small units, 1206 are medium units and remaining are large units. Gujarat is manufacturing about 6,600 types of chemical with total output of about 4.2 lakh metric tonnes.

At present the chemical industry of Gujarat is facing huge challenges. Economic slowdown, increased dumping from China are recognized as prime factors behind the slowdown of chemical industry in the state. Majority of chemical units in Gujarat are operating at a utilization rate of lower than 40%. Reduction in export is also restraining the growth of Gujarat’s chemical industry. This has drastically affected the chemical industries leading to shutdown of more than 350 chemical industries in the industrial areas of Ahmedabad, Ankleshwar and Vapi. On the back of rising environmental regulations and raw material prices, the economies of scale are decreasing which is again hampering the domestic production of chemicals in the state.

According to TechSci Research “The chemical unit’s operating in Ankleshwar & Vapi (major hub for chemicals in Gujarat) has been strongly hit by moratorium. The chemical industries in these two regions are operating at a utilization rate of 30% to 40% and the production cost has doubled which is further affected the chemical industry in the state.”