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Chemical - Regulations in India PDF
Chemical - Regulations in India PDF
May 8, 2012
Executive Summary 4
Interview Summary 35
Appendices
A. Appendix – Primary Research Contacts 39
B. Appendix – Industry Associations 40
C. Appendix – Comparison of RoHSs 41-49
D. References 50
• It has quite recently adopted WEEE/RoHS regulation (June, 2011) and is in the early stages of development of the
various associated mechanisms
• Compliance to REACH, RoHS and CLP in India is currently exclusively for the EXPORTS market, especially to
Europe
• Companies catering to the domestic market are bound by numerous local legislations that are not as stringent as
REACH
• Hence this report attempts to understand the Indian Chemical industry holistically, and tries to find how the
REACH, RoHS and CLP legislations would relate to the domestic as well as export market in the future
• The Indian chemicals industry is the twelfth-largest • India has a strong base for innovation in its network of 200
industry in the world and the third largest in Asia in national laboratories and 1,300 R&D units, which can be
terms of volume leveraged for the shift towards an innovation-based industry
• It is currently valued at around US$ 35 billion. India has • The chemical industry in India is witnessing increased focus
a diversified manufacturing base with a capacity to towards research and development, which in turn provides
produce quality chemicals for world consumers opportunities for growth of R&D hubs and industry specific
• Government of India (GoI) plans to invest US$ 33 institutes
billion in three approved Petroleum, Chemicals and • India has emerged as an exporter of dyes, exporting dyes to
Petrochemicals Investment Regions (PCPIRs); it also Germany, U.K., U.S., Switzerland, Spain, Turkey, Singapore
plans to establish port-based chemical parks in special and Japan
economic zones (SEZs) • The export of dyes is expected to increase to US$ 2.6 billion
• Majority of exports – dyes, dyestuffs and alkali in 2020
chemicals
•REACH Helpdesk for Apparel Exporters – An initiative •REACH Helpdesk for Leather Exporters – provided by TUV SUD
support by GiZ, Small Industries Development Bank of South Asia Pvt Ltd, on behalf of Council of Leather Exports,
India – SIDBI and Apparel Export Promotion Council – Ministry of Commerce & Industry, Govt of India
AEPC, India)
•Indian Apparel Trade with EU: Consists of 6 sub-sectors •Annual Turnover of USD 7.5 billion, Export – USD 3.84 billion
including, •EU accounts for 65.48 of India‟s Leather and Leather Products
• Knitted and woven outerwear, Bodywear, Sports Exports
clothing, Leather clothing, Fashion accessories
•Total Export from India to EU: USD 81.8 billion (Jan-Dec
2010)
Policy Framework:
• Licensing requirements have been removed, except for hazardous chemicals and a few special drugs
• 100% FDI is allowed under the automatic route, for all chemicals except hazardous ones
• Customs and Excise Duties: Peak customs rate of 7.5% on most chemicals, and excise duty of 16% on almost all chemicals
• PCPIR (Petroleum, Chemicals and Petrochemicals Investment Regions) Policy: introduced to boost the development of
chemicals and petrochemicals in investment regions
• USD 33 billion proposed investments
• Includes SEZs, industrial parks, free trade and warehousing zones, export=oriented units or growth centres
Imports Exports
• REACH directly applies to the European manufacturer and importer of chemicals and chemical containing products and requires them to demonstrate the
safety of their products put into the European markets by submitting detailed information on the intrinsic and toxicological properties of the products to the
central chemical agency (ECHA)
• Therefore, it is but natural that the EU importer shall ask his Indian supplier to furnish the required information and this is how the Indian exporters get
implicated within REACH
• If the Indian exporters wish to continue uninterrupted trade with the EU, they shall have to collect all the information, as required within REACH for
submitting to the ECHA
• It is important to note that submission of information to ECHA cannot be done by the Indian exporters
• It can either be done by the European importer provided he is willing to act as the registrant or if he refuses to take this responsibility and in certain
cases, if the Indian exporter does not wish to share proprietary information relating to his products, he shall have to appoint an “only representative”
• The “only representative” is the only legal entity authorized to pre-register on behalf of the Indian exporter
• Been in force since June 2007 • Not enacted so far for the domestic market.
Companies exporting to Europe satisfy
Status REACH requirements through the help
desks established by trade associations
• Substances and articles require registration • Indian chemical companies, mostly small
if brought into the EU in sufficient volume. and medium companies, complain of high
Some requirements in REACH apply also costs involved in the registration, testing
to articles and other such costs for compliance
• Articles containing Substances of Very • Companies are sceptical about the capital
High Concern (SVHCs) more than 0.1 costs of the compliance as well
weight-% need to be communicated to the • Since most of the companies serve the
supply chain (REACH art.33(1)). If an domestic market, many are not keen on the
article contains more than 0,1 weight-% of compliance
the SVHC and if the total amount of the • Many large Indian companies and foreign
SVHC in articles is more than 1 tonne a companies in India have been willing to
Impact on the Industry
notification to ECHA is required (Reach undergo the compliance process
art.7(2))
• Safe use data and other safety data to be
provided pro-actively
• 73 SVHCs identified by April, 2012
• As of April, 2012, 14 substances are
subject to authorisation. The aim of the
authorisation is that the substance would
not be used in Europe anymore
• Large volume of data collection
SVHC have posed new challenges to article suppliers. Here articles suppliers mean non-EU article exporters, EU importers and
manufacturers of articles.
Under REACH, an article is defined as an object which during production is given a special shape, surface or design, which
determines its function to a greater degree that does its chemical composition. e.g. automobile, garments, tires, plastics
products, electrical products, handicraft, toys, electronics. Thus, the limitation on SVHCs set out in the REACH regulation, has a
broad scope, affecting lots of industries.
• The major impact on Indian exporters of chemical substances so far is the high cost of registration, by way of sharing data
generation costs with the lead registrants, running into millions of Euros
• Exporters of chemical preparations to Europe also have to bear the burden of getting the ingredient substances registered
(again at high cost)
• Regarding the impact of REACH on Indian articles like apparel, leather articles, electrical and electronic components, auto
components, handicrafts, etc, being exported to Europe, there is a grey list of very toxic substances. These SVHCs shall
attract enhanced control and regulation when used for manufacturing of articles like apparel, leather products, auto
components, dyes, paints, electrical and electronic components and products, metal parts and components, plastic products,
etc
Outlook
• The implications on the export of articles shall be two-fold:
• Manufacturers and exporters of articles shall have to look for alternative safer chemicals; which would amount to
incorporating major changes in their product profile
• The search for safer substitutes that are not readily available will involve a lot of R&D, trials and expense
• These implications are further compounded by the fact that the SVHC list shall keep increasing with time. It is eventually
expected to contain 500 to 600 substances
• In the case of India-REACH, exporters have to appoint an OR (Only Representative) in the destination country to undertake
both the registration formalities as well as legal liability on behalf of the exporter
• CHEMEXCIL, the Chemicals & Cosmetics Export Promotion Council, has set up a REACH help desk and a web portal to
provide the latest updates to exporters. In order to provide professional assistance, CHEMEXCIL has appointed Sustainability
Support Services, (Europe) AB. Sweden, (SSS) to represent its member-exporters in European Union as „Only
Representative‟
• This arrangement has helped over 700 Indian companies go through the pre-registration and registration deadlines
• Through a MoU with SSS, the CII Standards and Conformity Assessment Task Force has decided to launch a nation-wide
capacity building programme across various export sectors (leather, garments, auto components, etc) to strengthen the supply
chain in meeting REACH and other similar regulations
• As a first step, experts from the European Chemical Agency (the nodal organization for REACH) have been invited as key
speakers in two back to back symposiums on REACH Regulations and their impact on Indian industry, in Delhi and Mumbai
• The symposiums, being organized jointly by CII and the Union Ministry of Chemicals and Fertilizers, will be the first face-to-
face interaction of ECHA officials with Indian industry and other stakeholders
• This will be followed by extended outreach programmes targeting impacted sectors over the next year. As deadlines are fast
approaching, the symposiums would provide an ideal forum to obtain clarifications and enhance understanding on coverage
as well as compliance issues
• India is the latest country to enact RoHS and WEEE legislation. Hazardous substance and electronic waste legislation is here
to stay and is expanding worldwide
• RoHS (Restriction of Hazardous Substance) legislation was previously enacted in the European Union, Japan, China, Korea,
and California. WEEE (Waste Electrical and Electronic Equipment) legislation was enacted in the EU, Korea, 25 US states,
and five Canadian provinces
• India has long been plagued by the problem of backyard recycling. India's new legislation is an attempt to address that
problem
• India is now on the list, and its new legislation laid by the Ministry of Environment and Forests, Government of India (covering
both RoHS and WEEE requirements) is known as the E-Waste (Management and Handling) Rules, 2011. India's WEEE
requirements will take effect in May 2012, and its RoHS requirements two years later
• (Http://moef.nic.in/downloads/rules-and-regulations/1035e_eng.pdf )
• This treats WEEE and RoHS identically in terms of scope, exclusions etc, and there is a considerable similarity with the EU
WEEE and RoHS legislation, although these are treated as totally separate legislation in the EU. The requirements are
similar to the EU's requirements
• The new waste rule will significantly change the way electronic waste is handled in India. Producers, collection centers,
dismantlers, and recyclers, to remain operating, will have to apply for a government-issued "Grant of Authorization" by July
31, 2012. Onsite storage of electronic waste will be limited to 180 days
• The new RoHS rule will limit the amount of hazardous substances present in electronic products produced and imported in
India ( source CII Reach Help desk and CPCB GUIDELINES FOR ENVIRONMENTALLY SOUND MANAGEMENT OF E-
WASTE Report)
INDIA RoHS
• India RoHS restricts the same six substances at the same maximum concentrations as in the EU but the scope of products is
different as explained below
• There is little information provided in the legislation regarding the process for compliance with India RoHS but the RoHS
requirements enter into force two years after this legislation is enacted, which is in May, 2014
Substances Use
Lead (Pb)> <1000 ppm Electrical and electronics industry in solder, lead-acid batteries, electronic components, cable sheathing and in the
glass of cathode-ray tubes
Mercury (Hg): < 1000 ppm Lamps, sensors, relays and so on
Cadmium (Cd): < 100 ppm electronic equipment, car batteries, and pigments, electroplated coatings, special solders, electric contacts, relays
and switched, PVC stabiliser etc
Hexavalent Chromium (Cr VI) < While some forms of chromium are non-toxic, Chromium VI can produce toxic effects. Found in passivation
1000 ppm coatings on metals and in corrosion resistant paints
Polybrominated Biphenyls (PBB): These are flame retardants found in electronic and electrical appliances. They have been found in indoor dust and
1000 ppm air through evaporation from plastics
Polybrominated Diphenyl Ethers These are also flame retardants found in electronic and electrical appliances. Combustion of printed wiring boards
(PBDE): < 1000 ppm release toxic emissions
India - Environment Regulation Industry Chemicals Report 2012 ©
08.05.2012 19
Finpro ry
India RoHS: Similarities and Differences
with EU RoHS
India RoHS EU RoHS and EU RoHS II (recast)
Legislation Joint for WEEE and RoHS Separate for WEEE and RoHS
Business Size Does not apply to Micro & Small Enterprises as defined under the All sizes in the categories above
Affected Micro, Small and Medium Enterprises Act, 2006 (See Table A in
slide no: 23)
RoHS Exemptions (i) See Appendix 2 for a comparison listing. A procedure exists for exemption requests which includes defined
(ii) Note: There are no time limitations for exemptions, no defined criteria that can be used for justification. Time limitations are defined
procedure for requesting exemption and no criteria that can be
used for justification
(For Schedule II and III, please go to the hyperlink given in Slide 19)
India - Environment Regulation Industry Chemicals Report 2012 ©
08.05.2012 23
Finpro ry
India RoHS: Challenges and Outlook
Challenges
• Lack of clarity on how RoHS would be adopted by companies (include producers, distributors, collection centres,
refurbishers, dismantlers, recyclers, consumers, or bulk consumers) involved in the manufacture, sale, purchase and
processing of electrical and electronic equipment or components
• The real problem India faces is a thriving backyard recycling industry (informal sector). E-waste is collected by recyclers
abroad and then sold to waste traders in India
• The complexity of e-waste flows within India and inadequate record-keeping (maintenance of registry) make an
estimation of the quantities and composition of e-waste within India, making enforcement of legislation difficult
• The draft rule does not specify how it will ensure that informal recyclers reduce their operations to dismantling and
collection activities. Furthermore, the underlying incentives that can result in the informal sector being able to outbid the
formal sector remain unaddressed
• A lack of awareness of the hazards of improper e-waste disposal, at the consumer-level, collector-level or recycler-level
or disposer-level
• Inadequate monitoring and enforcement mechanisms
Outlook
• Many electronic companies are willing to comply with the requirements
• It is expected that Indian companies will be more open to complying with RoHS than REACH
• The various regulations that are at various stages of enactment and implementation tries to achieve the broader
objectives similar to EU and the US regulations. Considering all the challenges mentioned above, it will be a tough task
for the government and regulatory bodies to achieve full adherence and compliance
• Similar to REACH, CLP legislation also is not yet present in India as of now (Rule in the draft stage)
• Only exporters of Chemicals to EU region comply to REACH and CLP requirements
• However, agencies such as Chemexcil and REACH Support Helpdesk are assisting Indian companies to comply to these
requirements
• Moreover, these agencies are helping create awareness among the domestic industry participants to move towards these
compliance requirements
• Various activities for implementing the GHS system in India is underway
• Instead of CLP, there are a host of legislations and acts that determine the classification, labeling and packaging especially
those that deal with Chemicals. Some of these regulations are,
Manufacture, Storage & Import of Hazardous Chemicals -1989 (Under Environment Protection Act)
• Quantity based approach in management of Hazards
• Rules On-Site plans for installations having hazardous substances more than Threshold Quantities
• Safety Report for Bulk Storages
Other Legislations
• The Hazardous Wastes (Management & Handling) Rules – 1989
• Motor Vehicles Act - 1988 & Rules thereunder ( Safety in transportation of Hazardous substances)
• The petroleum and Explosive Act - 1984 & Rules ( Safety in handling of Petroleum and Petrochemical including bulk storages)
• Factories Act -1948 ( Safety In Manufacturing Activity)
• The Emergency Planning , Preparedness & Response For Chemical Accidents Rules-1995
• The Public Liability Insurance Act & Rules- 1991 ( Payment Of Compensation To The Outsiders In Respect Of Major Incidents
In Factories)
CLASS-1 : EXPLOSIVES
• e.g. TNT, Symbol-Exploding bomb with orange background
CLASS-7:RADIOACTIVE SUBSTANCES
e.g. Uranium, Radium
CLASS-8 :CORROSIVE
e.g. Hydrochloric Acid, Sulphuric acid, Caustic Soda
„„Suppliers in unorganized sector have little knowledge of REACH. Unlike mass manufacturers like China, testing per
consignment for fashion garments is much more difficult and costly. India specialises in fashion garments, with lot of value
additions and embellishments. Compliance requires testing of these embellishments also.
A manufacturer supplying small lots of such products to EU will incur very high testing charges. REACH regulations will have a
long lasting implication on the Indian apparel industry.‟‟
„‟There is a recommendation to, in future, merge all related regulations for having uniform standards. India is contemplating
REACH specific to India. But so far it has not been enacted. Small and medium companies in the sector are completely
unaware of REACH and such regulations. They are also sceptical of the high costs involved, as they operate on very low
margins already‟‟
„The REACH and CLP market in China is much more matured than in India, as China is hosts a large number of European
businesses. India has seen an increase over the last few years in the awareness and sensitivity towards product related
environmental issues. ‟‟
• Identified that the chemical sector in India requires to go a long way towards REACH and CLP regulations
• RoHS regulations have been enacted. However, full scale implementation and compliance is expected to
face stiff challenges from the industry
• Large number of small and medium companies in the sector makes data gathering difficult – one of the
key reasons why implementation of such comprehensive regulations have been difficult in India
• Some of the administrative hurdles of the regulations – many ministries such as Ministry of Commerce
and Industry, Ministry of Chemicals and Fertilizers, Ministry of Environment & Forests, Ministry of Finance
etc, deliberating on the hierarchy and decision-making authority on chemicals management in India
• India has its own set of legislations and regulations which are getting evolved. Many government agencies
such as the Pollution Control Boards (Central and state level) are enforcing many of these regulations in a
strict manner now
• It needs to be seen how the many regulations will evolve into a comprehensive legislation similar to
REACH
• It is advised to closely monitor the regulatory developments in India on continuous basis, to gain more
understanding of how the various regulations (such as REACH, RoHS etc) are enacted and implemented
References