Govt proposes national centre to regulate chemical industry

The ministry of chemicals and fertilisers had proposed to set up a national chemical centre to formulate environment and human-friendly policies and contain risks posed by chemicals.

This is aimed at streamlining legislation governing the industry and making entities concerned responsible for their acts. The industry, at present, is governed by multiple legislations under several ministries — the Environment Protection Act, 1986; Factories Act, 1948; Motor Vehicles Act, 1988; Explosives Act, 1884; Disaster Management Act, 2005; CWC Act, 2000 and Land Acquisition Act, 1894.

"What we need is a REACH (registration, evaluation, authorisation and restriction of chemicals) legislation enacted in the European Union for protecting human health and environment. The Sustainable Policy and Chemical Act could replace 40 different environment-related legislations. Besides, there are no specific legislations for registration, ban and classification of substances," said an official source.

For this, the proposed centre would provide necessary regulatory framework, trade practices, duty structure and maintain an inventory of the chemical sector containing data on production, consumption, imports, exports and toxicological properties.

It also envisages setting up of the Chemical Standard Development Organisation under its jurisdiction to facilitate the industry to comply with international standards. The objective of these changes are primarily to increase exports and position India as the research and development hub for the sub-continent.

Exports have been affected by different guidelines across countries, specifically in Europe. Though chemical exports (drug and pharma, dye/intermediates/inorganic/organic and cosmetic/toiletries) grew by 34 per cent year over the year, much of the increase in CY12 has been due to rupee depreciation rather than actual volume because quantity-wise there has been only marginal increase in exports across categories. Also, there is need to diversify into speciality chemicals rather than focus on organic chemicals to exploit export opportunities.

For this, consolidation is necessary.

The government proposes to provide financial assistance for chemical companies for consolidation of smaller capacities and establish clusters by shifting downstream capacities closer to mother plants .