To remain competitive globally, we must negotiate better trade terms.

India’s textile chemical industry is evolving as a crucial enabler of the country’s manufacturing and export ambitions. As India’s textile market approaches the $240 billion mark, the demand for advanced, sustainable, and high-performance chemicals is driving innovation and competitiveness. In this conversation, Mihir V Shah, Executive Director, Vipul Organics, shares insights on growth trends, policy needs, and the industry’s role in powering Make in India 2.0.

What according to you is the current state of the Indian textile chemical industry?

The Indian textile industry is on a strong growth trajectory. It is valued at $240.8 billion in 2024 and projected to nearly double in less than a decade. Within this, textile chemicals form the bedrock of performance, innovation, and export readiness. Whether it’s dyes, pigments, or finishing agents, we’re enabling the modernisation of Indian textiles.

India holds a cost advantage in labour and capex compared to global peers, which makes us competitive in manufacturing. But higher power costs and infrastructure inefficiencies still dilute that edge. As a dyes and pigments manufacturer, we see firsthand how important it is to solve these challenges to unlock full-scale competitiveness.

What is the role of the textile chemical sector in Make in India 2.0 what are the emerging opportunities moving ahead?

Textile chemicals are not just supportive, they are strategic enablers. Here’s how we’re contributing to Make in India 2.0:

• Value addition: Innovations like eco-friendly dyes, digital printing inks, and sustainable auxiliaries are giving Indian textiles a competitive edge in global markets.
• Supporting Kasturi Cotton: We supply certified, compliant inputs aligned with India’s new premium cotton branding and the global demand for traceable, sustainable supply chains.
• Import substitution: Specialty chemicals were once largely imported. Today, players like us are manufacturing these locally, creating IP, jobs, and resilience.
• Green transformation: Sustainability is no longer optional. We’re leveraging green chemistry to meet international standards with biodegradable formulations, low-VOC systems, water-saving dyes. It’s the future.

What are the key challenges to align with Make in India 2.0 vision?

There are several structural and regulatory hurdles:

• Infrastructure bottlenecks: Logistics delays and inconsistent power supply can raise costs by 15–20 per cent. It impacts both chemical manufacturers and processors.
• Environmental compliance: Global buyers demand REACH, ZDHC, and OEKO-TEX certification. Vipul Organics has invested to meet these standards, but for many in the industry, especially MSMEs, this remains a tough hurdle.
• Fragmented supply base: With MSMEs dominating textile processing, tech adoption is uneven. This affects consistency and quality downstream.
• Skill and technology gaps: Advanced formulations, digital textile printing, sustainable dyeing, etc. require new technical capabilities and automation. We need more focused skill development.

What are the impact of tariff structures on textile chemical exports and competitiveness?

Tariff structures are a growing concern. For example:

• Increased tariffs, significantly increase the final price of textile chemicals for international buyers. This erodes the price competitiveness of exporters who cannot absorb the higher costs.
• Non-tariff barriers, especially in the EU, mean we must meet stringent certifications, which increase compliance costs.

Exporters often have to absorb part of these costs, which eats into margins, especially for MSMEs. To remain competitive globally, we must negotiate better trade terms and bring our tariff regimes in line with ASEAN countries like Vietnam and Indonesia.

How has the current GST framework impacted textile manufacturers, particularly SMEs and exporters, in terms of compliance, costs, and overall competitiveness?

GST has certainly improved inter-state logistics by removing entry taxes, which helps SMEs cut operational costs. This operational efficiency is a major benefit for SMEs, who often operate on small margins, especially those in the B2B segment.

The seamless input tax credit chain from raw material to finished goods, has also reduced the cascading effect of taxes, so overall production costs have come down, across the value chain.

However, the inverted duty structure in some categories, along with delays in input tax credit refunds, has created liquidity issues, particularly for exporters. For chemical inputs like dyes and pigments, rationalising GST slabs and ensuring timely refunds would go a long way in supporting both manufacturers and end-users in the textile value chain.

What key policy and regulatory measures do you believe are needed to strengthen the textile sector’s growth under the Make in India 2.0 initiative?

Several focused steps can accelerate our progress:

• R&D incentives: Establish Textile Chemical Innovation Hubs to drive sustainable product development with tax breaks for green innovation.
• Integrated infrastructure: Fast-track chemical and textile parks with shared utilities, ZLD systems, and logistics support.
• Export incentives: Extend PLI-like schemes to specialty textile chemicals, particularly those aligned with sustainability goals.
• Skill-building: Launch specialised training programs under Skill India to develop expertise in textile chemistry, EHS, and digital technologies.
• Ease of doing business: Simplify environmental clearance timelines and provide single-window approvals for chemical units.

If we continue on this trajectory, with the right policy, infrastructure, and innovation support, India will not just be a textile manufacturing hub, but a global centre for sustainable, high-performance textile solutions.

At Vipul Organics, we’re committed to this vision. We’re investing in green chemistry, compliance, and next-gen dye technologies that empower the entire textile value chain, from local MSMEs to global brands.