Market Overview
India’s persistent air and water pollution problems create steady demand for environmental technologies and solutions. In 2020, industry experts estimated India’s overall environmental technologies market, including goods and services, to be worth over $23 billion. The International Trade Administration (ITA)’s Top Markets Report on Environmental Technologies, released in April 2020, ranked India as the sixth largest market in the world, with subsector rankings of second for water/wastewater management, ninth for air pollution control, and eighth for solid waste and recycling segments.
India’s complex environmental regulations hinge on five major pieces of legislation: The Environment (Protection) Act, 1986 amended 1991; Forest (Conservation) Act, 1980 amended 1988; Wildlife (Protection) Act, 1972; the Water (Prevention and Control of Pollution) Act, 1974 amended 1988; and the Air (Prevention and Control of Pollution) Act, 1981 amended 1987. The Ministry of Environment, Forest & Climate Change (MoEFCC) is the federal agency responsible for the implementation and oversight of environmental laws in India.
The Central Pollution Control Board (CPCB) implements the policies framed by the MoEFCC and provides technical services to the Ministry. Enforcement, however, is delegated to the states through State Pollution Control Boards (SPCBs), or Pollution Control Committees in the eight union territories that answer to state government heads rather than the federal authority. In 2010, India established the National Green Tribunal to better uphold these environmental protections. The Tribunal plays an increasingly integral role in the effort to create a more sustainable national development path.
There is an inconsistent application of rules across states and weak regulatory compliance. The CPCB has identified seventeen highly polluting industrial categories, including iron and steel plants, non-ferrous metallurgical units, pharmaceutical and petrochemical complexes, fertilizers and pesticide plants, thermal power plants, textile manufacturers, pulp and paper factories, tanneries, and chlor-alkali units. Standards for emission or discharge of pollutants from various industries are available on the CPCB website.
The SPCBs focus on managing these seventeen industries in their states. Coal-fired thermal power plants are the single largest contributors to industrial air pollution and are also regulated by the Ministry of Power. The Ministry of Housing and Urban Affairs and the state-level Urban Local Bodies are important stakeholders in issues regarding municipal wastewater management.
United States (U.S.) exports of services increasingly outnumber exports of equipment due to the expansion of technology licensing, engineering contracts, and consultancy work in this market. Trade figures become more difficult to track as environmental technology and solutions become more complex. Tracking India’s imports of the key categories of equipment that are used to address environmental challenges can help estimate growth trends. In 2020, India’s imports of environmental technology equipment totaled $931 million, with $106 million in imports from the U.S.
The Government of India launched the National Action Plan on Climate Change in 2008 to enhance climate change mitigation and adaption efforts. The Climate Change Division of MoEFCC is India’s chief agency for climate change cooperation and global negotiations. It is also the primary unit for coordinating the National Action Plan on Climate Change. India launched the third edition of the Sustainable Development Goals (SDGs) India Index and Dashboard in June 2021. Developed in collaboration with the United Nations (UN) in India and launched in 2018, the index uses 115 indicators to document and rank the progress made by the Indian States and Union Territories toward achieving the SDGs. Additional details are available here: SDG India Index & Dashboard 2020-21.
Market Opportunities
Promising subsectors for pollution control equipment include:
- Water and wastewater management / water quality monitoring
- Air pollution control / air quality monitoring
- Municipal solid waste management
- Environmental engineering procurement construction services
- Climate change mitigation and climate change after effect containment technologies
Water and Wastewater Management
Water and wastewater management is the most promising subsector in India’s environmental technology segment. According to the last available report, nearly 40% of industrial water and 63% of municipal wastewater gets discharged untreated into local rivers, lakes, and streams. Less than 1% of treated wastewater is reused. Some cities such as New Delhi, Surat, Bengaluru, and Nagpur have created infrastructure to recycle municipal wastewater for non-potable use.
India’s demand for water is projected to be twice as much as the available supply by 2030. To overcome these challenges, both the public and private sector facilities have ambitious plans to develop comprehensive water and wastewater treatment and distribution infrastructure. Demand for high end treatment technologies, such as desalination, is growing.
The coastal states of Tamil Nadu and Gujarat are frontrunners in setting up desalination plants for drinking water supply. Power plants, oil refineries, iron and steel plants, distilleries, cement, fertilizer plants, and other industries are pursuing the principle of Reuse, Recycle and Zero Liquid Discharge (ZLD). Some of these industries are setting up desalination plants to meet process water requirements.
Air Pollution Control/Air Quality Monitoring
Air pollution control equipment is also in high demand, as many of the world’s most polluted cities are in India. In 2019, MoEFCC launched the National Clean Air Program (NCAP) to reduce air pollution levels in 102 of the most polluted cities by 20% within five years. The NCAP calls for the reduction of emissions, expansion of air monitoring networks, capacity building for pollution management, and strengthening of public awareness. Procurement of Continuous Ambient Air Quality Monitoring Systems (CAAQMS) under this project is a key export opportunity for American companies. The NCAP sets a target to install 150 new CAAQMS and increase the number of manual monitoring stations from 703 to 500. By February 2021, twenty new CAAQMS had been installed, and 193 CAAQMS had been installed in total. The data collected from these stations will be used as inputs to create Air Quality Index evaluations for the respective cities. In addition to the procurement of equipment, these developments will create the need for consultancy services to analyze the data collected, identify the pollution source apportionment, and recommend appropriate actions for pollution abatement.
On the industrial air pollution front, over 50% of India’s installed power generation capacity is fueled by coal-fired power plants. India has stringent emission norms for power plants with a target of 60-80% reduction in particulate matter (PM), sulfur oxides (SOx), nitrogen oxides (NOx), and mercury emissions within the next five years. To comply with this mandate, power producers must procure and install technology for emissions control. Government-owned company NTPC Limited has been the frontrunner in soliciting bids for Flue Gas Desulfurization (FGD) systems. India is the largest emitter of sulfur oxides in the world, accounting for 15% of the anthropogenic emissions. Most of the other power producers lag behind.
Municipal Solid Waste Management
Waste management equipment and service companies will find opportunities in India, as government programs have created demand for waste hauling, compacting, processing, and waste-to-energy equipment that meets international standards. In 2014, the Government of India launched its flagship urban cleanup and sanitation program, the Swachh Bharat Mission, with the twin objectives of making urban India free of open defecation and implementing 100% scientific practices for solid waste management. Government records show significant strides in both these areas: open defecation has been eradicated from most of India’s urban areas, and the scientific processing of solid waste, which was only 18% in 2014, achieved 65% coverage in 2020. In addition to new regulations for landfills and solid waste processing, the government has also been providing funding for waste-to-energy projects and other solutions for the improvement of cities.
Climate Change Mitigation and Adaptation
Climate mitigation and adaptation technologies cover a range of products and services in the cross-section of the energy, mining, infrastructure, water, and agricultural sectors. There is a need for climate friendly technologies, such as renewable energy technologies; mitigative technologies, such as capture of methane from coal mines; and technologies that minimize the effects of climate change on human life and property, such as extreme weather forecasting systems. In May 2019, the government created the new Jal Shakti Ministry, bringing all water-related agencies under one ministry to provide safe drinking water to the people of India. The Jal Shakti Ministry immediately launched its Jal Jeevan Mission: a national initiative to provide piped drinking water to 146 million households in 700,000 villages by 2024. The mission earmarked a budget of $51 billion to be given to the states to increase household water connection coverage from 18.33% in 2019 to 100% by 2024. This ambitious project will create opportunities for suppliers of water meters, water quality monitoring systems, water management-related IT (information technology) systems, tertiary treatment technology, and water EPC (Engineering, Procurement, Construction) companies.
Market Entry
The following barriers have been identified by the Environmental Technologies Trade Advisory Committee (ETTAC), the U.S. Department of Commerce’s Office of Energy and Environmental Industries (OEEI), and the U.S. Commercial Service in India as the most problematic for environmental technologies companies attempting to export to or work in India:
High Tariffs
India has relatively high tariffs for environmental technologies, particularly in monitoring and instrumentation. High import taxes also diminish the price competitiveness of higher quality, and thus, pricier, U.S. environmental technologies.
Regional Market Fragmentation
Environmental technology markets in India are highly fragmented, and it can be difficult to find a representative or distributor that can provide national sales coverage. Successful companies expend additional resources to develop export strategies on a region-by-region basis.
Lack of Transparency, Price Sensitivity and Corrupt Practices in Tenders
Transparency in how tenders are bid is an ongoing issue in India that is further complicated by regional fragmentation. Tenders are also plagued by a lowest bidder mentality with little assessment of cost/quality trade-offs. U.S. companies have reported that public tenders are rife with institutional corruption that hinders their ability to compete.
Limited Capacity of Local Industry
Local partners are tacitly, if not formally, required in tenders. However, many national players in the Indian water market are new to the sector and may have no prior experience developing or implementing water projects. This creates additional management burdens for U.S. companies entering joint ventures and partnerships.
There is domestic competition in almost all subsectors. U.S. companies are more competitive in high technology areas, such as membrane-based tertiary treatment systems, continuous air quality monitoring systems, waste-to-energy systems, and sophisticated instrumentation. Most of the reputed international companies from Europe, Australia, and other parts of Asia are already operating in India. Some of them have also established offices in India and serve the market through a network of dealers and distributors.
Please find information on the tariff and non-tariff barriers that U.S. companies face when exporting to India here: 2021 National Trade Estimate Report
Finance
Please refer to India - Trade Financing.
We advise U.S. companies to monitor the UN Development Business, World Bank, Asian Development Bank, and the Japan Bank for International Cooperation 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.
Trade Events
IFAT India, December 2-4, 2021 – IFAT India
Water Expo, February 7-9, 2022 – Water and Wastewater Industry - Water Expo
Clean India/Water India Expo, March 23-25, 2022 – Clean India 2022 - International Exhibitions, Expo and Conference in India 2022
Contact Us
Arup Mitra, Senior Commercial Specialist and Office Director – U.S. Commercial Service Kolkata, India – Email Arup Mitra.
Arup Mitra has been a Senior Commercial Specialist and Office Director of the U.S. Commercial Service in Kolkata, India since 2005. He co-leads the India environmental team. From 1997-2005, he worked as Regional Director for the U.S.-Asia Environmental Partnership (US-AEP) Program of the U.S. Agency for International Development (USAID). He has diverse professional experience of over 28 years in private- and public-sector companies in India as well as with the U.S. government. He is a Chemical Engineer with a Post Graduate Degree in Business Management from the Indian Institute of Management, Kolkata.
