India Country Market
Insights and Opportunities
Pollution Control Equipment Sector
Overview: It is estimated that 30-40 percent 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. For the purpose of this report, solid waste management is not included in the PCE market, however, renewable energy (RE) is considered as part of this market.
India's pollution control equipment industry is growing at 10-12 percent annually, largely because of government initiatives and a proactive judiciary. The biomedical waste management segment has been growing at a rate of 20 percent 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. Imports from the U.S. are also expected to increase due to the weakening of the U.S. Dollar and the general preference for 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 subsector. 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 percent of demand in this segment.
The United States has traditionally enjoyed a dominant position in the market, with nearly 33 percent of market share. In some segments such as air pollution control equipment, imports from the U.S. constitute almost 40 percent of total imports. 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.
Opportunities: Private sector demand is growing for increased energy efficiency and renewable energy, vehicular and industrial air pollution control, bio-medical waste disposal, and water-recycling technologies. India has a large potential in the renewable energy (RE) segment - an estimated current aggregate of over 100,000 MW of which, as a medium term goal, 10 percent should be achieved by 2012. In addition, there is a huge potential market for generating power, and thermal applications using solar, wind and biomass energy. Exploitation of chemical sources of energy, geothermal energy, tidal energy and bio-fuels for automotive applications is also envisioned.
Strict enforcement and Implementation of even a fraction of the suggested measures in the National Environment Policy of 2004 would create a huge opportunity for international players in this sector.
In addition, major investments will be required by the automobile industry to comply with Euro IV norms in India's 11 largest cities, where vehicular population is worsening (Euro III norms will become mandatory across India by 2010). Promising sub-sectors in pollution control equipment include: Energy Efficiency and Renewable Energy; Water and Wastewater Management; Solid Waste Management; Vehicular Pollution Control; and Air Pollution Control.