Last April we wrote about India’s new manufacturing policy. They needed one then, and some say still do. Manufacturing in the land of cumin and curry has stalled. But don’t be fooled into thinking that means manufacturing is not happening at all in India — it means growth has stalled, not production.
Some wonder, rhetorically, how could Indian manufacturing have kept growing…?
Answer: by finding new markets.
Maybe you saw the news (India GDP news May 31, 2012) that India’s GDP growth slowed to 5.3% in Q1. This represents a three-year low for the nation. However, let’s not count India out just yet. Not even close. The nation, like many of its neighbors, is pausing, looking for new markets to pour its tremendous energy into.
One of those markets looks like it might be the chemicals industry.
Let’s take a look at the chemical industry (and related policy) in India.
India industrial sector growth: chemicals. In India, the chemical industry is said to be one of the oldest in the nation. It’s essential to any nation’s economic development that is based on manufacturing. In years past, India has had to import and almost-embarrassing amount of raw materials, including chemicals. Still, the Indian chemical sector is growing, estimated now to be worth about $108 billion.
Asia itself is a rising star in chemical sales. For example, over the last 10 years, Asia’s share of global chemical sales has increased by ~14%. Currently, the Indian chemical industry accounts for approximately 7% of India’s GDP. The share of industry in national exports hovers near 11%. Despite its large size and significant GDP profile, India’s chemicals industry represents only about 3% of global chemicals.
The Indian chemical industry is one of the most diversified sectors touching thousands of commercial products. As the raw materials engine in a booming manufacturing ship, the chemical industry is central to industrial and the agricultural development. The chemical industry provides essential building blocks for multiple downstream industries, such as textile, paper, paint, soap, detergent, pharmaceutical, varnish, etc. In India, the chemical sector is known to be largely based on feed stock derivatives from cracking of naphtha in oil refineries providing the building blocks, such as benzene, toluene, xylene, cresols, etc.
India environmental policy: chemical policy like REACH? India’s Ministry of Chemicals and Fertilizers has declared the need to invigorate the chemicals aspect of its environmental policy. Holding out for REACH-like* legislation might be a stretch in the near future (someday maybe). But the Ministry is talking in the direction of the safer use of chemicals. “For the protection of human health and the environment, and in order to reduce the current number of chemical-related laws,” authorities are saying.
*REACH is a European regulation, a pioneer initiative in the world on that deals with the registration, evaluation, authorisation and restriction of chemical substances, which entered into effect on June 1, 2007 in the European Union.
However, in India, the Department of Chemicals and Petrochemicals did begin a consultation process of the draft national chemicals policy in April of this year (2012). The resulting document includes a wide range of objectives and proposals.
Included in the documentation is the stated need to consolidate the “multiple legislations in India governing the chemicals industry that fall under the purview of different ministries.”
Also, according to the draft, India lacks legislation that addresses the following:
- the registration of substances
- preparation of a national inventory
- restrictions on hazardous substances
- banning of certain substances
- detailed classification and labeling criteria
- transport classification
The draft policy also calls for the creation of a “National Chemical Centre” (NCC). They would perform functions such as:
- draft legislation
- monitor its implementation
- monitor international trade practices
- identify opportunities for innovation and technology
The NCC would have a role in disseminating information about hazardous chemicals and create and maintain a chemicals inventory, which would include data on production, consumption and toxicological properties.
A second new body which the document states should also be set up under the guidance of the department is a “Chemical Standard Development Organisation”, or CSDO. They would “drive consensus regarding national requirements, including safety norms.”
Sound like REACH? Yes — ish — in theory. In reality though it’s light years away, in miles, sure, but mostly in time.