Prices of fabric dyes and chemicals used in the wet processing segment of the apparel production chain are likely to go up if current currency volatility continues. This is likely to pose a challenge for the garment sector in Tirupur. Reason: a substantial volume of the raw materials used for production of fabric dyes and chemicals is imported. With the rupee depreciating against the dollar, imports have become costlier.

Currently, almost 80 per cent of H-acid, a main raw material for the manufacture of fabric dyes, is imported. Apparel manufacturers in Tirupur feel any significant cost hike in fabric dyes and chemicals would result in higher processing charges which, in turn, will have a cascading effect on garment prices. The situation will thus hit competitiveness of garment exporters who are already facing stiff price challenges in the global market. If the currency volatility is not halted, the cost of dyes and chemicals will increase.

Apart from H-acid, a sizeable quantity of other raw materials like vinyl sulfone and K-acid used in fabric dyes production, acrylamide and polyvinyl alcohol used for manufacturing chemicals meant for the dyeing industry, is imported.