+ Recommendations for Chemicals and Petrochemicals industry - CII Blog

India is the sixth largest producer of chemicals globally. The sector is at present valued at $150-155 billion and is growing at 8-10% annually. It provides employment to 7.5 lakh people, and accounts for a little over 2% to India’s GDP. CII has identified certain key issues that require primary consideration to strengthen the development of this sector and exploit its abundant potential

Short-term Measures

1. Improvements in Environmental and Safety Issues

  • Environment Impact Assessment (EIA) timelines, as defined under the EIA Notification, should be strictly adhered to. All the steps of EIA clearance, such as screening, scoping and appraisal, should be done in a single presentation. The EIA report with standard TOR and potential additional TOR should be allowed to be submitted along with Form 1, and appraised directly. The entire process should not extend beyond 3 months (90 days).
  • CII requests consent for validity period differentiation based on risk assessment, and fast-track approval of ‘Responsible Care’ certified units.
  • The absence of separate norms for deep-sea discharge defeats the very purpose of deep-sea discharge and discourages industries from developing any infrastructure in this regard. The chemicals industry’s waste water quality standards require immediate review for discharge into the deep sea, in consultation with industry.

2. Trade Policy Initiatives

  • Europe, USA and Africa are major markets and India should engage with these regions for expediting free trade agreements (FTAs) with the EU and Africa.
  • Trade agreements for chemicals should be negotiated in line with the size of domestic production and planned investments for specific segments.
  • China is a major import source. It also levies high anti-dumping duty on Pyridine exported from India. Industry urges the Government to remove this levy on exports from India to China.

Medium-term Measures

1. Integrated Chemicals and Petrochemicals Policy

The current draft Chemicals Policy covers only the chemicals sector. The petrochemicals sector is governed by a separate policy of 2007. An integrated policy should be established to create an enabling environment and infrastructure; develop a framework for promoting safety, security and R&D; and encourage initiatives to help both sectors become more competitive.

2. Standards for Ecological Conservation

  • It is important to establish mandatory standards for both producers and sellers across the value chain to be at par with global quality products. The Green Project Rating should be introduced with the focus on emissions, waste recovery, and resource efficiency.
  • With 40% of China’s agro-chemical units closing down due to pollution issues, Indian producers, who are more environment-compliant, have huge export opportunities to explore.

3. Rebuilding the Infrastructural Landscape

  • In India, ISO tanks can be used to transport regular chemicals but not Class A petroleum products. Class A petroleum products are required to be transported only by road tankers approved by the Petroleum and Explosives Safety Organization (PESO). Industry is keen to switch to transportation by rail to reduce the movement of hazardous chemicals by road, and ensure safety for the villages/cities through which these roads pass. Thus, ISO tanks are required to transport Class A petroleum products. PESO has applied to the Ministry of Petroleum and Natural Gas for approval to start issuing permissions for use of ISO tanks for Class A petroleum products.

Industry seeks the creation of world-class infrastructure at the ports for efficient bulk liquid coastal movement, and public warehousing facilities for all types of packed cargo, including dangerous goods. This will enable the industry to source feedstock competitively.