Environmental Global Market
Insights and Opportunities
Overview: It is estimated that 30-40% of India’s industrial units produce sizeable quantities of pollutants. There are about 3 million small-scale units in the country and most of these are not using any pollution control equipment. The Government of India has classified 17 industrial sectors as strong pollutants. India is one of the largest and one of the fastest growing producers of greenhouse gases. India’s pollution control equipment industry is growing at 10-12% annually, largely because of government initiatives and a proactive judiciary. The biomedical waste management segment has been growing at a rate of 20% per year due to enforcement of the Bio-medical Waste (Management and Handling) Rule of 1998. Some of the advanced equipment required for treatment of biomedical waste must be imported from developed countries, as they are not manufactured domestically, which creates significant opportunities for U.S. providers. We also expect the import from the U.S. would increase due to the weakening of the U.S. Dollar and the general preference to U.S. products and services.
The pollution control equipment industry is unorganized and dominated by small-scale industrial firms lacking the resources to invest in research and development. There are a few Indian engineering companies offering services and equipment as part of turnkey consulting services.
The Ministry of Environment and Forests governs this sub-sector. A third of its annual budget is allocated for pollution abatement. However, the market is not restricted to the government sector. Government initiatives are aimed at taking pollution control beyond end-of-the-pipe issues. The private sector has been investing substantially in environmentally friendly production processes and accounts for nearly 40% of demand in this segment.
Poor enforcement of environmental laws is a key reason for the low market potential compared to developed countries. The market for end-of-the-pipe equipment is price sensitive, so consumers generally favor equipment with low life cycle costs. Imports constitute nearly 40% of the total market share due to two main factors: Unlike other sectors, multi-lateral and bi-lateral agreements on ecology and the environment play a major role in this sector. This results in increased demand for imported pollution control equipment, because donor-led investments normally require international quality equipment that is not manufactured in India. Multinational corporations with manufacturing facilities in India insist on the replication of technology for pollution control. This almost always requires imports. The United States has traditionally enjoyed a dominant position in the market, with nearly 33% of market share. In some segments such as air pollution control equipment, imports from Industry sources believe that the import market will continue to increase and the domestic market share will decline due to increasing demand for improved and innovative technologies that cannot be met by domestic suppliers.