Since the time of invention of the first synthetic and organic dyes in the 19^th century till today, textile world is much aware of the possible perils of dyes on humans and environment. Research institutes engaged in the process of investigating about the effects of dyes came up with the fact that; not all, but some dyes are potentially carcinogenic. Many countries, especially Germany and Europe have taken special initiatives to enact regulations prohibiting the usage, manufacture and handling of such harmful dyes.

Current Chinese Market Scenario:

The chemical industry of China is fragmented, and their domestic companies contribute to 40% share of the global market. The first half of 2008, saw some hurdles in the Chinese dyestuff industry like their own Government policies, abrupt increase in production costs, RMB appreciation, and natural calamities like earthquake and heavy snow fall. Environmental pressures were also prevalent in the industry due to Olympic and global economic uncertainties. Cost of many chemicals used as raw material in the dyeing industry has increased recently. This is because the Chinese Government has decided to shut down some of its chemical units in Beijing and many other provinces to control industrial pollution for a few months. These shut downs have resulted in the acute shortage of chemicals for the dyestuff industry. As many as 1000 dyeing and printing factories have been shut down in Zhejiang Province alone; while many others in Hebei, Henan and Shandong Province have been asked to stop production till the 2008 Beijing Olympic Games.

Total dyestuff output registered a growth of 10.8% in 2007, which has declined by 1.3 % in the first half of the current year. Many Indian dyes and textile chemical companies' source intermediates from China but rising prices and shortage of supply have caused an uncertainty in the market. However, with the abolition of export rebates and elevation of export prices, prices of Chinese dyestuff in the international market are now at par with the prices of other Asian countries.

'REACH' Regulations for EU:

The pre-registration work under the REACH (regulation concerning the Registration, Evaluation, Authorization and Restriction of Chemicals) of the European Union started on June 1st, 2008. In compliance to this regulation, it is mandatory for manufacturers exporting to European countries to provide specific details of the chemical components in the products, and if the substances are not hazardous to human health and environment. The key determining factors of this regulation will be to determine:

• The substances that are to be released, and
• Whether the substances released are harmful to human health and environment.

The exporters are required to prove the safety of their products, or else they will not be allowed to enter EU market. Experts believe that REACH is undoubtedly the most rigid and complicated non-tariff rule at present, affecting the Chinese textile industry in a massive way. Several leading Chinese enterprises have set up a special department to take care of the REACH rules. However, many SMEs are facing serious problems, especially due to lack of adequate knowledge and finance. These domestic enterprises are unable to follow REACH regulations, forcing many of them to consider giving up exporting to EU.