This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 10/10/2018

Overview

India is grappling with significant challenges in air, water and waste management. The legislative framework is strong, but enforcement is relatively weak. Half of the world's 20 most polluted cities are in India, according to World Health Organization’s Global Urban Ambient Air Pollution 2016 database. About 62 million tons of municipal solid waste is generated each year in the 468 cities of over 100,000 people; only 70 percent is collected and only 23 percent is processed or treated. While 94 percent of Indians have access to drinking water, just under 40 percent of the population has access to a sanitary wastewater system, a disparity that reflects the need for wastewater treatment systems. Almost 63 percent of municipal wastewater and 40 percent of industrial wastewater is left untreated and discharged. 30-40 percent of India’s industrial units produce sizeable quantities of pollutants. There are about 3 million small-scale enterprises in the country and most of these are using minimal or no pollution control equipment. The Government of India has classified 60 industry categories as highly polluting; these sectors are subject to stringent standards. The Indian Parliament passed the National Green Tribunal Act in 2010, which led to the creation of the National Green Tribunal. Its purpose is the effective and expeditious processing of cases relating to environmental protection. Orders of the Green Tribunal are driving many of the recent environment management initiatives.

Important environmental sub-sectors include drinking water supply, waste water treatment, municipal solid waste management, industrial hazardous waste management, industrial air pollution, pollution monitoring equipment and services, and carbon abatement technologies.

The Indian pollution control industry consists of many specialized equipment suppliers, chemical suppliers, engineering-procurement-construction (EPC) contractors, consultants, build-own-operate and transfer (BOOT)/build-own-operate (BOO) operators, analytical equipment and services companies. The equipment market is dominated by small and medium sized units manufacturing end-of-pipe treatment solutions. Major suppliers of high end pollution abatement technology include France, Germany, Italy, United Kingdom, United States, Canada and Japan. Most of the leading international companies operate in India.

Market barriers for export of environmental technologies and services to India include:

  • High tariffs - particularly in area of monitoring and instrumentation;
  • Fragmentation of the market across the country it difficult to find an agent or a representative that can truly provide national coverage;
  • Price sensitivity in tender - lowest bidder mentality with little assessment of cost/quality trade-offs;
  • Limited sophistication of local partners- many of the Indian companies are relatively new to the sector and may not have adequate experience developing and implementing the projects.

India’s environmental technologies market including goods and services is valued at $17.87 billion.

Units: $ millions

 

2016

2017

2018 (estimate)

Total Market Size

16301

17524

17870

Total Local Production

11900

12793

13046

Total Exports

2618

2814

2870

Total Imports

5831

6269

6392

Imports from the U.S.

2175

2338

 

(total market size = (total local production + imports) - exports)

Leading Sub-Sectors

Leading sub-sectors in pollution control equipment include:

Sub Sector Projected Growth Rate

Water and wastewater management 13-15%

Air pollution control 8-10%

Municipal solid waste management 6-8%

Water and wastewater is the most promising sub-sector in India’s environmental segment. This accounts for 26 percent of India’s environmental technologies industry and is expected to grow 13-15 percent every year over the next five years. The government is primarily involved in the treatment of raw water, water transmission and distribution and sewage treatment operations. The private sector industries in power, food and beverage, chemicals, pharmaceuticals, refineries and textiles sectors. These industries prefer advanced treatment technological systems such as reverse osmosis membranes for treating their wastewater. The water treatment market is gradually shifting from chemical treatment and demineralization plants to membrane technology. The concept of wastewater recycling and zero discharge systems is becoming more widely accepted as new technologies such as sequencing batch reactor (SBR) and membrane bioreactor (MBR) based treatment gain in adoption.

Coal fired thermal power plants offer significant opportunities for sale of air pollution control equipment. About 58 percent of the installed power generation capacity is fueled by coal. India’s Ministry of Environment, Forests & Climate Change in December 2015 notified changes related and relevant to thermal power plants under the Environment (Protection) Amendment Rule, 2015. These changes target 60-80 percent reductions in particulate matter (PM), sulfur oxide (SOx), nitrogen oxides (NOx), mercury emission and freshwater withdrawal. India’s Ministry of Power, in its October 2017 action plan, has established the below goals for various pollutant categories in 650 power plants of India, comprising 196,667 Mega Watt (MW) of installed capacity:

  • SOX- Flue Gas Desulfurization (FGD) units will be installed in 414 plants by 2022, covering 161,522 MW capacity. Remaining 235 plants are either complying with SOx norms or are planned for phase-out.
  • PM- 222 plants will need to install/upgrade Electrostatic Precipitator to achieve PM norms. This entails capacity of 161,402 MW.
  • NOx- pre-combustion modifications in boiler, installation of low NOx burners, over fire air along with installation of Selective Catalytic/Non-Catalytic Reduction technology (SCR/SNCR) systems (no concrete roadmap seen)

India’s Central Pollution Control Board (CPCB) issued directions in December 2017 to thermal power plants to ensure compliance by 2022. Overall 160,000 MW of thermal power capacity is required to have FGD systems by 2021 (we don’t see this as realistic but expect significant progress over seven years). Indian utilities will spend $8.5 billion on the installation of FGD systems to reach these goals. About 55,000 MW capacity is owned by the National Thermal Power Corporation (NTPC), which has issued tenders for FGD systems about 25,000 MW capacity already. 80,000 MW capacity is owned by State Electricity Boards, which are financially weak and are unlikely to meet the stipulated timeframe. The Independent Power Producers own about 30,000 MW capacity and can install FGD systems but are moving slowly as their financials are based on old tariffs which do not fully factor in the capital required for pollution abatement equipment.

The Municipal Solid Waste (Management & Handling) Rules, 2016 contain new standards for composition of compost, treatment of leachates, emissions from incineration, and criteria for waste treatment facilities and landfills. Coupled with the focus of the new regulation on waste to energy and funding available from the government of India for upgradation of cities, we see renewed opportunities for U.S. waste management equipment and service companies.

Opportunities

The Government of India has allocated $250 million to the National Mission for Clean Ganga (NMCG) since 2015, of which $156 million has gone to state level agencies/executing agencies. The NMGC funded projects will continue to be a major opportunity for municipal water projects. So far, 192 projects have been funded, out of which 49 projects have been completed.

The Ministry of Water Resources, Government of India formulated a policy for Public Private Partnership (PPP) projects in the municipal wastewater sector through an innovative hybrid annuity model under the Namami Ganges (Clean Ganga) Program. The two most successful categories of PPPs in India are the Build, Operate and Transfer - End-User (in which the end user owns the project) and the DBO model Design, Build, Operate Model (DBO). In the latter, the urban local body funds the capital costs for the project and uses the private sector to bring in technology and managerial skills to operate and maintain the assets for a period of 5 to 10 years. The construction, technology and operating risks are borne by the private sector operator while the financing risk is borne by the government counterpart.

The Government of India rolled out, in April 2015, the Smart Cities Mission - a $1 trillion urban sector plan to create 100 "Smart Cities" and rejuvenate 500 other cities and towns over the next five years. Clean water supply, sanitation and waste management, efficient mobility and public transport are important components of this new initiative. So far, a total investment of $28 billion has been proposed by the designated smart cities. These cities set up Special Purpose Vehicles (SPVs) as limited liability companies to implement the projects. 2855 projects worth $20 billion are in various stages of implementation. U.S. companies can partner with local companies to bid on these projects.

We advise U.S. companies to also monitor the U.N. Development Business, World Bank, Asian Development Bank (ADB), the Japan Bank for International Cooperation (JBIC) websites and publications for soft loan and grant funded project announcements. These projects offer significant front-end consulting opportunities and the possibility to supply equipment during the project implementation phase.

Web Resources

Ministry of Urban Development http://www.moud.gov.in

Smart Cities Mission http://smartcities.gov.in/

National Mission for Clean Ganga http://nmcg.nic.in/

Central Pollution Control Board http://www.cpcb.nic.in/

Environmental Information System – ENVIS India http://envis.nic.in/

National Mission for Clean Ganga http://nmcg.nic.in/

Atal Mission for Rejuvenation & Urban Transformation (AMRUT) http://amrut.gov.in

Japan International Cooperation Agency (JICA) http://www.jica.go.jp/india/english/

U.S. Agency for International Development (USAID) http://www.usaid.gov/india

U.N. Development Business tenders http://www.devbusiness.com/

World Bank projects http://www.worldbank.org/projects/

Asian Development Bank’s India Country Partnership Strategy (2018-2022) https://www.adb.org/documents/india-country-partnership-strategy-2018-2022

For more information about opportunities in this sector contact U.S. Commercial Service Industry Specialist: Arup Kumar Mitra at Arup.Mitra@trade.gov

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



India Environmental Technology Trade Development and Promotion