However these factors have also caused the consolidation of major players in the industry. Currently there is an over capacity situation in the domestic market that has forced the industry to look at exports for growth. With the closure of many manufacturing bases in the US and Europe, MNCs are shifting to Asian countries like India and China. The major players include Atul Products Jaysynth Dyechem, Meghmani Organics and Colortex. MNC s like BASF, Ciba Specialty and Clariant are also into trading of high performance specialty dyes in the India.
China has an advantage over India on the cost of basic raw materials.
In the past western countries have passed strict environmental protection norms banning production of certain dyes and intermediates in their countries to identify new manufacturing bases in east for their sourcing requirements. The low labour cost and relatively less stringent environmental norms have favoured production in India. Low entry barriers and fiscal concessions granted to SSI units had led to mushrooming in the number of units. However rationalization of excise duty structure and implementation of stricter pollution control norms have led to the closure of a large number of SSI units. The dyestuff industry is clearly segmented into large and small players.