ICC Cheminar 2016- Sustainable Chemistry: India’s Future Growth Story

Sustainable Chemistry:
India’s Future Growth Story

iii
About Indian Chamber of Commerce
Founded in 1925, Indian Chamber of Commerce (ICC) is the leading and only National Chamber of
Commerce operating from Kolkata, and one of the most pro-active and forward-looking Chambers in the
country today. Its membership spans some of the most prominent and major industrial groups in India.
ICC is also the founder member of FICCI, the apex body of business and industry in India. ICC’s forte is its
ability to anticipate the needs of the future, respond to challenges, and prepare the stakeholders in the
economy to benefit from these changes and opportunities. Set up by a group of pioneering industrialists
led by Mr G D Birla, the Indian Chamber of Commerce was closely associated with the Indian Freedom
Movement, as the first organized voice of indigenous Indian Industry. Several of the distinguished
industry leaders in India, such as Mr B M Birla, Sir Ardeshir Dalal, Sir Badridas Goenka, Mr S P Jain, Lala
Karam Chand Thapar, Mr Russi Mody, Mr Ashok Jain, Mr. Sanjiv Goenka, Mr Roopen Roy have led the ICC
as its President. Currently, Mr. Shiv Siddhant Kaul, Managing Director, Nicco Engineering Services Limited
is leading the Chamber as its President.
ICC is the only Chamber from India to win the first prize in World Chambers Competition in Quebec,
Canada.
ICC’s North-East Initiative has gained a new momentum and dynamism over the last few years, and the
Chamber has been hugely successful in spreading awareness about the great economic potential of the
North-East at national and international levels. Trade & Investment shows on North-East in countries like
Singapore, Thailand and Vietnam have created new vistas of economic co-operation between the North-
East of India and South-East Asia. ICC has a special focus upon India’s trade & commerce relations with
South & South-East Asian nations, in sync with India’s ‘Look East’ Policy, and has played a key role in
building synergies between India and her Asian neighbors’ like Singapore, Indonesia, Bangladesh, and
Bhutan through Trade & Business Delegation Exchanges, and large Investment Summits.
ICC also has a very strong focus upon Economic Research & Policy issues - it regularly undertakes Macro-
economic Surveys/Studies, prepares State Investment Climate Reports and Sector Reports, provides
necessary Policy Inputs & Budget Recommendations to Governments at State & Central levels.
The Indian Chamber of Commerce headquartered in Kolkata, over the last few years has truly emerged as
a national Chamber of repute, with full-fledged offices in New Delhi, Mumbai, Guwahati, Bhubaneshwar,
Patna and Ranchi functioning efficiently, and building meaningful synergies among Industry and
Government by addressing strategic issues of regional and national significance

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Foreword by President of ICC
The Indian chemical industry has been growing at a robust rate. With manufacturing landscape shifting to
Asia, India, which currently accounts for only 3% share of the global chemical market, has the potential to
emerge as one of the major destinations for chemical companies worldwide. But for this to happen,
industry will have to improve efficiency and adhere to global environment & quality norms.
Sustainable development is critical to foster the growth of the Indian chemical industry. Economic growth
has been focal point of the policy makers for overall development of the country. While this is true, there
has been an increased need to do it in an environmentally benign way. Balancing ecology with economy is
the way forward to ensure sustainable development. Globally, the chemical industry has been one of the
early adopters of eco-friendly processing by investing in green technologies.
The Five Year Plan document (2012-2017) for the chemical industry stresses on sustainability –
particularly resource and environment sustainability. Water, environmental impact, raw materials, safety
over lifecycle and energy use are some of the issues grappling the industry. Indian chemical companies
will have to invest in innovative solutions to find appropriate answers to these challenges.
As per the National Manufacturing Policy, the government aims to increase the share of manufacturing in
GDP to at least 25% by 2025 (from current 16%). To achieve this ambitious objective, the Indian chemical
industry will have to play a catalytic role. The National Chemical Policy (NCP), which is currently under
preparation, stresses on the importance of research and development, safety, sustainability and green
chemicals. Sustainable development - one of the mainstays of the policy - focuses on four key areas -
health, safety, quality and environment.
Within the chemical industry, the Responsible Care Initiative is a huge step forward in the campaign to
make sustainability as part of companies’ business decision. The Responsible Care initiative acts as an
enabler for continuous improvement in SHE performance, together with open and transparent
communication with stakeholders. Regulatory developments in the end-user industries are also leading
to adoption of green initiatives in the Indian chemical industry. Manufacturing companies are looking at
specialty chemical additives that help in improving the functionality of the product as well as reduce the
environmental load either by achieving the same end product in minimum number of steps or consuming
lesser amount of chemicals than before.
Recently, the Indian chemical industry has begun the journey on the green path and will have to pursue it
with innovative solutions in future in order to emerge winner on the global map. This report aims to
provide a critical analysis of the current scenario of the Indian Chemical Industry in terms of its growth
potential, investment opportunities and promotion. We have made a deliberate effort in keeping the
approach objective. I certainly hope that stakeholders involved in the sector shall be benefitted from this
study, and the report will largely be able to lay down the broad contours of the future of Indian Chemicals.
Shiv Siddhant Kaul
President, Indian Chamber of Commerce

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Preface
Manish Panchal
Senior Practice Head – Chemical & Energy
TATA Strategic Management Group
manish.panchal@tsmg.com
This report on “Sustainable Chemistry: India’s Future Growth Story” is a part of TATA Strategic
Management Group (TSMG) Chemical Practice’s endeavor to highlight the utility of Green Chemistry in
promoting sustainable growth in the chemical industry.
The chemical industry is making living in the 21st century more enriching by contributing towards
building energy-efficient homes, more comfortable bedding, longer-lasting paints and affordable clothing.
From increased agricultural productivity and better cure for human diseases to smoother skin creams
and sparkling toothpastes, chemicals play a vital role in everyday life.
Along with economic growth, sustainable development is also critical towards growth of the Indian
chemical industry. Government of India has emphasised to all industries to focus on developing products
that has Zero Defect and Zero Effects (ZED). There has been a thrust in this development throughadoption
of green methods such as use of ozone towards water treatment and zero liquid discharge techniques. We
need to put more thrust in this direction, balancing the environment with the economy.
This report gives an overview of key sub-segments of chemical industry - viz. Basic Organic and Inorganic,
Petrochemicals, Agrochemicals, Fertilizers and Specialty Chemicals. It analyses the impact that each of
these sub segments have in terms of the critical challenges they address that contributes towards
economic, social or industrial activity and impact on other sectors within the chemical industry.
We are grateful to Indian Chamber of Commerce for collaborating with us in the preparation of this
resourceful report. As always, it has been an enriching experience for the Tata Strategic (Chemicals) team
to prepare this report. We hope it acts as a guiding light for all the stakeholders in the Indian chemical
industry and provides some direction towards the betterment of the economy and the environment.

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Table of Contents
Indian economy and mega trends 2
Indian chemical industry overview 4
Transition towards sustainability & green chemistry 10
Barriers to implementation of green chemistry in India 13
The way forward for sustainability 14
References 15
About TATA Strategic 16

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Indian Economy and Growth Drivers
In the past couple of decades, India has seen a sharp rise in population. The average age of the 1.2 billion
Indian population is expected to be 29 years in 2020, which will be the largest pool of young population in
the world. With rising share of working population, manufacturing competitiveness is expected to
increase. Training the large number of people to enhance their skill set, though, is a growing challenge.
The last two decades have seen intense economic activity in India. India is likely to make progress in
implementing economic policy reforms and help provide support to business and consumer confidence. A
comparison between the first and second decades of post-reforms periods indicates that the rate of
growth of the Indian economy has gained momentum. Also, within these 2 decades, there have been
phases of high growth which suggest the underlying potential of the economy. India’s GDP has grown at
an average of 7.8% p.a. from FY05 to FY15.Indian trade as a percentage of GDP has risen in the last
decade. While the contribution of exports in GDP has gone up from 20% in FY10 to 23% in FY15, the
share of imports has increased from 26% in FY10 to 31% in FY12 and came down to 26% in FY15. Trade
deficit has gone down from 6% in FY10 to 3% in FY15. India’s trade flows as % of GDP are lower than
China and Russia, higher than Brazil and are expected to remain steady over the next five years.
With increasing GDP, disposable income levels are also rising. Key driver for rising incomes are the
economic growth and a huge chunk of population in working age category. Along with that, there is a rise
in consumption levels also, especially in Foods and Beverages which are synced with Fertilizers and
Packaging industry. Affordable housing needs have led to expansion of research on innovative building
materials.
With rising incomes, about 45% households have shifted from low to middle income category. Also,
growing urbanization is expected to reach 40% by 2030 from current level of ~30%. This is impacting
sectors like automotive, appliances and electronics. Urban infrastructure also is experiencing a shift
leading to rising polymers and advanced engineering plastics needs.
Rapid urbanization is going to result in enhanced contribution from cities which would account for more
than 70% of GDP by 2030. Increasing urbanization has led to the scarcity of resources like water, arable
land and farm labour. As a result, there has been a shift of focus towards sustainable practices and means
to increase agriculture yields by taking efficient measures. This is an opportunity for specialty fertilizers
and water treatment chemicals to address the key challenges of resource scarcity.
There is a growing need for electricity. About 30% of Indian population still doesn’t receive electricity,
with most of them living in rural areas. Appetite for physical and digital connectivity is increasing with
rising television penetration and social media. Enhanced infrastructure abilities are expected in near
future. Key segments which are going to gain are transmission and optical fibre industry along with the
polymers and polymer additives sector.
For economic growth to be sustainable along with eventual improvement in the business environment,
the government of India has launched several key reforms as enablers for new businesses along with
expansion on the developing businesses. Under the Make in India campaign, the government is
attempting to make the ease of doing business in the country more profound and profitable for stake
holders. The Land acquisition bill is a major policy initiative that will help in faster acquisition of land for
projects. Tax reforms focused on Goods and Services will be instrumental in reducing the number of taxes
and will hence simplify the process of payments. Administrative reforms are coming up to improve
governance through initiatives to improve transparency, reliability and efficiency. Government has also
announced the “100 Smart Cities” plan under which the quality of living will be uplifted in key tier I/II
cities. The total grant of Rs 1 lakh crore, from the Centre, state and the urban local bodies (ULBs), will
account for 20 per cent of the required funding for the mission that is aimed at a better use of technology
in basic service and infrastructure provision in the 100 chosen cities for the 1st phase of the mission.
Further, to ensure ease of doing business, the state government has launched a randomised labour

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inspection regime for factories and establishments. The move is on the lines of measures initiated by the
government, which has brought in a computerised system to send inspectors randomly on inspections.
This has been implemented in Maharashtra and is expected to be implemented in other states as well.
Given these trends in the economy, the Indian chemical industry is expected to benefit from them in the
long run.
Indian Chemical Industry overview
India’s chemical industry contributes approximately 7% to the country’s GDP and accounted for ~13-
14% of the total Indian exports in 2015. The Indian chemical industry accounts for ~4% of the global
chemical industry. Indian chemical industry is currently estimated at ~USD 151 billion (including
pharmaceuticals) and has been growing at 9.8% CAGR over the past three years. The demand growth is
expected to primarily be fuelled by domestic consumption because per capita consumption of most of the
chemicals is much lower than global averages. Moreover, with a strong outlook for key end user
industries, the demand for chemical products is expected to surge in the coming years.
Exhibit 1: Projected annual market growth till FY'25
Sources: Industry reports, Tata Strategic analysis
15%
12%
10%
14%
16%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Packaging Auto Apparel E&E Construction

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Industry segments
Bulk Chemicals
Organic Chemicals: Organic chemicals are important constituents of useful products such as synthetic
fibres, drugs and pharmaceuticals. They are structurally diverse and show multiple applications. The
demand for organic chemicals in India has increased at nearly 9 per cent between FY11- FY15 to reach
4.3 MMTPA in FY15. Domestic production has increased at 1 per centper annum and imports grew at a
rate of 15 per cent between FY11-FY15.The stagnation in the domestic production has come from the
large volume of imports from countries like China, Taiwan and Malaysia driven by low import duty. This
has been attributed to the rising cost of production in India largely owing to the lack of technology and
high fixed costs. This has reflected in a low capacity utilization rate of 64%.
Five major organic chemicals produced in India are Methanol (209 KT), Ethyl Acetate (328 KT) and its
derivatives like Formaldehyde (256 KT), Acetic Acid (160 KT) and Chloro-methanes (221 KT). Together
they contribute to ~2/3rd of Indian basic organic chemical industry.
Market outlook: Going forward, the domestic demand for the basic organic chemicals is expected to
grow at 10% CAGR over the next five years. This growth will be mainly driven by the growth in the end-
use industry due to increasing demand. This growth can be realized by forward integration of current
facilities with the downstream units, ensuring support to the industry - both regulatory & fiscal, and
support for state-of-the-art world class facilities in PCPIRs. poor infrastructure, high cost of feedstock and
under-utilization of installed capacities have acted as a major hurdle in the achievement of optimum
Demand & Supply (KT)
1550 1640 1686 1792 1619
3002
3507 3766 3953
4264
61
64
70
73
64
50
60
70
80
90
100
0
1000
2000
3000
4000
5000
FY11 FY12 FY13 FY14 FY15
Production Consumption Utilization Rate
Utilization rate (%)
Source: Ministry of Chemicals and Petrochemicals
Exhibit 2: Production and Consumption of Organic Chemicals by India
187 315 407 335 241
1639
2182
2487 2496
2886
Exports Imports
Exhibit 3: Trade of Organic Chemicals by India (kT)

6
operational capacities of plant and machinery. Ensuring feedstock availability, stringent government
regulations against cheap imports, skilled manpower and innovating new applications of organic
chemicals are the major factors that would drive the growth of this market in the next five years.
Inorganic Chemicals: Inorganic chemicals consist of basic inorganic and alkaline chemicals. Indian
alkaline chemicals sector is very old and enjoys a larger share of production in the inorganic segment.
Typically having originated from minerals, these chemicals are used as intermediaries for other industrial
and manufacturing processes. They are used in fertilizers and serve as the precursor to a number of
industries such as Home and Personal care, Metals and Mining, Pharmaceuticals, Leather and Packaging.
The demand for inorganic chemicals in India has been increasing at nearly 15 per cent from FY11 - FY15
and has reached the level of 1.7MMTPA. However, the domestic supply has grown at a slower pace
resulting in the gradual widening of demand supply gap which was primarily bridged through imports.
Domestic production grew at 0.6% per annum and imports grew at a rate of 19%between FY11& FY 15.
Market outlook:In the next decade, the domestic demand for the basic inorganic chemicals is expected to
grow mainly driven by the growth in segments like alumina, papers, detergents& paper. Domestic
utilization rates of the Indian plants improved to 75% in FY15 from 72% in FY12 and are further
expected to grow.
Demand & Supply (KT)
898 881 873 892 922947 1032
1399
1598 1670
79
72 72 74 75
50
60
70
80
90
100
0
500
1000
1500
2000
Production Consumption Utilization Rate
Exhibit 4: Production and Consumption of Inorganic Chemicals by India
406
327
163 167 164
455 479
689
874 912
Exports Imports
Exhibit 5: Trade Scenario of Inorganic Chemicals in India (kT)

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Petrochemicals
Petrochemicals are a crucial part of the Indian Chemical industry and play a key role towards economic
development. They are derived from natural sources such as crude oil and natural gas. Further they can
be segmented into olefins, aromatics and synthesis gas. Examples of olefins include ethylene/propylene
which is used in industrial production of chemicals, plastics & plastic products.
Production of petrochemicals has grown at a rate of 3.5 per cent from ~10MMTPA in FY11 to 11.6MMTPA
in FY15. Contribution of Indian Petrochemicals sector towards global market is not substantial. This is
due to a low per capita domestic consumption of polymers, which stands at ~9.7 kg as compared to the
world average of ~25 kg. Consumption grew at ~5.6 per cent CAGR between FY11 and FY12 from 11.5
MMTPA in FY11 to 14.4 MMTPA in FY15 with the utilization rate of 78-80%. The outgrowing
consumption levels, availability issues of key raw material and stagnating capacity additions have led to
an increase in the imports from India at 11% CAGR in the last five years from 3.3 MMTPA in FY11 to 5
MMTPA in FY15.
Market outlook:In the near term, the demand is expected to grow at a CAGR of ~10%, driven by the
rising demand for olefins, including ethylene and propylene. However, the growth in aromatics segment
will be marginal as compared to other areas. Demand as well as capacity growth in aromatics such as
benzene and toluene will be marginal compared to overall market size. Large capacity additions are
taking place in the ethane rich Middle East and demand rich China. Out of the 30 million tons of ethylene
Demand & Supply (MMTPA)
11.6 12.1
13.1 13.1
14.4
10.1
11.0 11.2 11.4 11.6
78
82
80 80 78
50
60
70
80
90
100
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
Consumption Production Utilization Rate
Exhibit 6: Production and Consumption of Basic Major Petrochemicals by India
1913
2304 2298
2614
2253
3338 3353
4223 4295
5068
Exports Imports
Exhibit 7: Trade Scenario of Basic Major Petrochemicals (kT)

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capacity additions expected during period 2014 and 2019, 9 million tons are expected in the Middle East
alone. Since ethane based petrochemical products are cheaper than petrochemical products in India,
domestic producers are expected to witness a pressure in margins.
Specialty Chemicals
Specialty chemicals are chemical products that are sold on the basis of their performance or function,
rather than for their composition. In today’s highly competitive environment, specialty chemicals have
the potential to help end use sectors to differentiate their products with respect to the competition. These
chemicals play an important role in several end use industries such as dyes & pigments, flavours&
fragrances, leather, construction, paper and personal care segments.
Indian specialty chemicals encompass products from paints, coatings and plastics to home care
surfactants, flavours and fragrances. Being performance-oriented, Speciality Chemicals touch upon every
segment of population these days. The Indian specialty chemical industry stands at ~USD 30 billion
currently and is expected to grow at ~14% per annum CAGR over the next decade.
Market outlook: Driving factors for the growth in specialty chemicals segment are multi-fold. Firstly, the
growing demand from the end use industry has been key to the high growth in specialty chemicals
segment. Secondly, the Chinese chemical industry is stagnating due to increased, tightening pollution
control, labour costs and strengthening of Chinese Yuan against the American USD. This encourages
exports from India, being the closest international surrogate for chemical products globally. Increase in
GDP and Indian population will result in consumption-driven growth in key end markets over the next
decade and an increased need for better products and services. Currently, the penetration of specialty
chemicals within India's end markets is low. With an increased focus on improving products, usage
intensity of speciality chemicals within end markets such as consumer durables, food additives, and
surfactants will rise in India over the next decade. Also, as the economy develops, on stringent regulation
of products and strengthening of consumption standards, usage of speciality chemicals can be promoted.
Agrochemicals
Food security has come up as a concern for India due to the growing population. Agrochemicals can play a
major role in enhancing productivity and crop protection post-harvest. Broad sub-segments covered
under agrochemicals are Insecticides, Herbicides, Fungicides and Bio-pesticides. They are diluted in
recommended doses and applied on seeds, soil, irrigation water and crops to prevent damage from pests,
weeds and diseases. Insecticides are the largest sub-segment of agrochemicals with 60% market share,
whereas herbicides with16% market share are the fastest growing segment in India.
India is the fourth largest global producer of agrochemicals after the US, Japan and China. This segment
generated a value of ~USD 5 billion in FY15 and is expected to grow at a CAGR of 12% per annum during
the next decade. Approximately 50% of the demand comes from domestic consumers while the rest goes
towards exports. While the domestic demand is expected to grow at 8-10% per annum in the next five
years, exports are estimated to grow in double digits.
Market outlook:Despite strong growth prospects, low awareness levels amongst Indian farmers
regarding government policies, origination of counterfeit agrochemicals from unorganized sector,
inefficient distribution system and low interest towards formulating new molecules are some of the
issues faced by the segment. However, due to low per capita consumption levels (0.6 kg/ha) compared to
global average (3 kg/ha), thrust on campaigns like Make in India and a shift of interests of global players
towards India as a manufacturing base, the segment foresees a lot of opportunities towards growth and
diversification. The large pool of technically skilled labour in India is a key driver for Indian players to
initiate contract manufacturing and setup research centres.

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Fertilizers
India is one of the major regions contributing to the rising fertilizer demand. Fertilizer consumption
increased from 50.1 million tonnes in FY09 to 58.8 million tonnes in FY12, led by a rise in phosphorus
and potash consumption. But, due to adverse climate and price issues, consumption fell to 53.6 million
tonnes in FY15.
Currently, urea accounts for 57% of fertilizer consumption in India. DAP has a relative share of 14.2% of
fertilizer consumption. MoP has 5.3% share in the consumption. Uttar Pradesh is the largest consumer of
urea with 19.9% share in the overall urea consumption of India. Though, urea’s share is steady at ~56-
58% of the total fertilizer consumption by India, NBS (Nutrient based subsidy) has made non-urea
fertilizer production viable. NBS allows producers to increase farm gate prices & still get constant
subsidy. A large portion of urea is still being imported. Urea has historically been used heavily because of
its relatively low price but with the government’s mandate of promoting “neem urea”, which is more
effective in transferring nutrients to plants, the growth in consumption is expected to stay muted. Muriel
of Potash (MoP) is not being produced in the country, though the consumption is rising.
The eastern coast accounts for ~65% DAP capacities in India whereas most of the urea production is
located in the West and North. Additionally, companies on the east coast majorly import raw material for
DAP from Australia and South East Asia. Natural gas for urea production is met through domestic gas and
two LNG terminals set up in Gujarat. Key players in the fertilizer market include IFFCO, Coromandel, RCF
Ltd., Nagarjuna, TATA Chemicals Ltd.
Market outlook: Lack of monsoon and relatively higher prices of complex fertilizers have impacted the
overall consumption of fertilizers in 2015-16. Though urea consumption is expected to grow at relatively
slower pace (CAGR estimated at 2.4% up till FY25), non-urea fertilisers would register a steady growth.
Companies' efforts to educate farmers about balanced usage of nutrients would drive the demand of non-
urea fertilisers. The government is hopeful for players to develop and market innovative formulations
which could be tailored to particular local soil and crop requirements. Since subsidy would be given on
the nutrient bases, players developing newer formulations will be able to rate the products based on
demand.
2.5
4.2
2.5
3.3
FY15 FY19
Exports Domestic
Exhibit 8: Indian crop protection industry (in USD billion)

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Transition towards Sustainability & Green Chemistry
Prelude
It is estimated that by 2030 the world’s population will reach 8.3 billion and going by the current
consumption patterns, it would require 50% more food, 45% more energy and 30% more water. At this
rate, one would need four planets to sustain a century later. But sustainability is not just limited to
environment protection.
Protecting the environment and natural resources is a key thread in sustainability. Consumers have
become conscious about the importance of eco-friendly products and as a result, product manufacturers
are incorporating changes to suit consumer demand.
The Indian government has pitched for ‘Make in India’ with ‘zero defect zero effect’ strategy giving a clear
message that India needs to manufacture quality products with zero effect on the environment. With the
zero defect zero effect, also known as the 'ZED maturity model' campaign, the government is essentially
emphasising on quality (using clean technology) over quantity, thereby enabling Brand India to get
visibility in the manufacturing centre stage of the world.
Case I: Ozone for Sustainability
Ozone was first used in water treatment in the late 1800s. Ozone is an unstable gas comprising three
oxygen atoms. It readily degrades back to oxygen, and during this transition, a free oxygen atom, or free
radical gets formed. The free oxygen radical is highly reactive and short lived; under normal conditions it
will only survive for milliseconds.
Ozone has greater disinfection effectiveness against bacteria and viruses compared to chlorination. In
addition, the oxidizing properties can also reduce the concentration of iron, manganese, sulphur and
reduce or eliminate taste and odour problems. Ozone oxidizes the iron, manganese, and sulphur in the
water to form insoluble metal oxides or elemental sulphur. These insoluble particles are then removed
by post-filtration. Organic particles and chemicals will be eliminated through either coagulation or
chemical oxidation.
In certain countries such as France, Switzerland and the USA, the municipalities provide ozonised water
to households for drinking purposes. Ozone is used as a valuable raw material in a sustainable way, such
as the Ozonolysis of oleic acid or unsaturated fatty acids from edible oil. Ozone plays an important role in
effluent water treatment. This practice was started by the pulp and paper industry whereby phenolic
substances were destroyed using ozone. Using ozone to treat wastewater has many benefits:
 Kills bacteria effectively
 Oxidises substances such as iron and sulphur so that they can be filtered out of the solution
 There are no nasty odours or residues produced from the treatment
 Ozone converts back into oxygen quickly, and leaves no trace once it has been used
The disadvantages of using ozone as a treatment for wastewater are:
 The treatment requires energy in the form of electricity; this will cost money and will not work
when the power is lost
 The treatment cannot remove dissolved minerals and salts
 Ozone treatment can sometimes produce by-products such as bromate that can harm human
health if they are not controlled

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Case II: Zero Liquid Discharge
Water, being the most important commodity on earth, sees 70% of its global consumption in agriculture.
In Maharashtra, 80% of water consumption in agriculture is used solely for sugarcane and this has
created havoc, especially in the drought prone areas in the state. With water being essential for
consumption, its usage for industry would be deemed as secondary. India is ranked second behind China
in terms of total use of water, although per capita consumption is below the global average.
Zero Liquid Discharge, as the words imply is a technology which achieves no liquid discharge but only
solid discharges. This does not mean that 100% of the water has to be recovered. A ZLD system simply
means that no liquid waste leaves the boundary of the facility.
One of the major benefits it offers is that it recovers and then recycles water from the waste water stream.
This drastically reduces the wastage of water. In the last few years, there have been NGO movements
across different parts of the world- and especially in the producing countries like China and India – to
control these discharges of hazardous chemicals into rivers, lakes and groundwater from textile factories.
Governments in China and India are implementing stringent laws and clamping down on polluting
factories for wastewater discharge, which includes Zero Liquid Discharge (ZLD).
ZLD guidelines were recently introduced for four industrial sectors (textile (wet processing), distilleries,
pulp and paper and tanneries) in India. Since March 2015, a series of notices have been sent to factories
asking them to submit action plan for achieving ZLD or face severe penalties (including shut down). The
ZLD mandate has helped increase the focus of the industry to water which has traditionally been an
under-priced resource.
While the ZLD technology has been available and mandated in industries in Europe since the 1980s, it is
still at a relatively nascent stage in India. This is largely owing to high capital investments and even
higher operating expenses. More than 90% of this operating cost is incurred during evaporation, which is
a very energy intensive process.
ZLD has its merits such as:
 No impact on surrounding soil salinity, groundwater pollution or ecology of river bodies
 Conservation of water resource through recovery and re-use of treated effluent
 Recovery and re-use of salt used in the textile dyeing process
But, ZLD also has some de-merits, such as:
 Use of higher amount of chemicals in wastewater treatment
 Increase in energy usage
 Generation of enormous amount of hazardous sludge and other solid waste
 Impact on cost of processing (implementing ZLD pushes up costs by 25-30%)

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Looking at the Tirupur ZLD success story- which is the first of its kind in the world- the Indian
government initiated a draft regulation on 22ndOctober 2015, mandating ZLD for textile units having
wastewater discharge of more than 25 KLD (Kilolitres per day), including re-use of the treated water back
in process. No groundwater extraction will be allowed by industry except for make-up water and drinking
purposes. The Bangladesh government has also announced in September 2015 that it is keen to
implement Zero Liquid Discharge system in another four years in their country.
Initiatives in Green Chemistry
India, being one of the largest Asian markets, is rapidly adopting green chemistry & engineering practices
due to the current changing realities such as: enforcement from regulatory bodies, societal awareness,
industry realizing the potential, government recognizing its role, and so on. This shift in existing dynamics
opens up opportunities in the coming decade for entering the emerging green chemistry market in India.
Responsible Care
Responsible Care (RC) is an initiative by the chemical industry, which calls on companies to demonstrate
their commitment to improve all aspects of performance, which relate to protection of health, safety and
environment. This initiative was started in Canada in the late 1980s and has gained worldwide
momentum. This initiative is being managed on a national basis by The Chemical Industry Association of
the countries concerned. The Responsible Care initiative acts as an enabler for continuous improvement
in HSE performance, together with open and transparent communication with stakeholders.
Some of the benefits of Responsible Care are following:
 Safe and responsible handling of chemicals through the entire life cycle builds public trust and
confidence in chemicals and the companies practicing RC
 Reduces pollution & water consumption, improves energy efficiency and usage of renewable
energy
 Improves business management efficiency by better targeting of worthwhile market
opportunities
 Reduces the likelihood of unnecessary capital and other expenditure when it becomes clear that
risks outweigh further investment in chemical development
An interesting development transpired in a small place in the South of India called Tirupur in 2010. Known
as the ‘Knit City’, due to the plethora of T-Shirt processing and garmenting units located here, Tirupur’s
700–odd dyeing units were ordered to be shut down by the Madras High Court in 2011 on a petition moved
by the Farmers Association in the area. The petition claimed that these units were discharging hazardous
dyes and chemicals into the Noyyal River and into the surrounding farmlands and this had caused the river
water and farmlands to become toxic – resulting in children developing skin problems, livestock dying after
drinking water from the Noyyal River and field cultivation getting impossible due to the highly coloured
groundwater. The Total Dissolved Solids (TDS) of the effluent being discharged by these units was 4000-
5000 ppm, well above the legal limit of 2100 ppm.
The closure of these 700- odd units severely impacted the USD 1.8 billion industry in this area, and even led
to migration of workers and export orders from Tirupur to other cities!
The Tirupur cluster is a startling example of how sustainability gives rise to innovation and long- term
environmental protection in practice. The closure of the dyeing units led to the evolution ofZero Liquid
Discharge. The concept of ZLD has been successfully implemented in Tirupur and subsequently in many
parts of India and even at the Common Effluent Treatment Plants (CETPs) set up by the government for
industrial clusters.
Exhibit 9: ZLD in Tirupur

13
Role of the Government in adopting Green Chemistry
Green chemistry, which aims at producing eco-friendly chemicals through sustainable means with
minimal waste & optimum output, has the potential to give a big push to the government’s Swachh Bharat
mission and other sustainable development goals. With the government’s thrust in the manufacturing
sector, experts believe chemical and allied industries have a very critical role to play in making the
initiative sustainable and environmentally viable. Green chemistry is not only important from the
environment perspective but from economic enterprise gain as well. In view of this, the Office of Principal
Scientific Adviser to the Government of India has constituted a committee to address specific issues faced
by the Chemical Industry. The committee has identified five sectors of Indian Chemical Industry for
adopting Green Chemistry concepts and is in the process of making its recommendations.
The government has also been instrumental in urging the industry to adopt these practices. The
Department of Chemicals & Petrochemicals, Government of India, urged the industry to adopt green
processes to make products that will not have a harmful effect on the environment. They further stated
that strict compliance with regulatory regime for environmental protection, adoption of green
technological solutions and efficient use of resources appear to be key to the future growth of the
industry.
Barriers to implementation of green chemistry in India
Owing to shrinking margins and increasing pressure to comply with environmental norms faced by the
industry, it has started seeing green chemistry as a tool to enable them to achieve both economic and
environmental competitiveness. However, there are certain barriers to be overcome for the industry to
make inroads in this direction.
1. Lack of availability of green technologies: Green chemistry based solutions for many
chemistries/processes like nitration, sulphonation and friedel craft. are not yet available. In the
absence of such solutions, the industry carries out these processes in conventional ways, using
huge quantities of acids, alkalis and other reagents. The low conversion, low yield, poor
selectivity and huge quantities of effluent generated make these processes quite undesirable but
the industry does not have a viable option.
2. Communication gap between industry and solution providers: One of the key barriers is the
communication gap between the industry and such solution providers. The main reasons could
be the lack of proximity between the industry and the solution provider or insufficient marketing
of the potential solution by the solution provider or due to industry not putting enough efforts to
search and look around for solutions.
3. Basic knowledge of green principles: Given the novelty, chemists & chemical engineers
working on designing new products and processes may have limited knowledge about the basic
principles of green chemistry & engineering. It is critical to ensure that the team has a workable
knowledge about these principles. Emphasis of academia should be on developing the applied
knowledge instead of maintaining the focus on theoretical knowledge.
4. Scale-up and commercialization: There are many inventions/innovations that have already
been developed by various academic and research institutes and these are potential solutions for
some of the environmental challenges faced by the industry. However, these solutions have not
been pursued after lab scale development. Scale-up and commercialisation is a barrier because it
calls for both academic/research institutes as well as industries to stretch themselves beyond
their boundaries. A way of overcoming this barrier is the incorporation of green chemistry
principles right from the design stage.
5. Notion of green chemistry being costly for SMEs: Certain myths about green chemistry being
complex and difficult, impractical etc. are also a barrier in the implementation of green chemistry
in the industry. It has however been established that green chemistry based solutions can be

14
commercialised, even for small & mid-sized pharma and fine chemical companies, with minimal
capital investment.
6. Regulatory hurdles: This is a big barrier for pharmaceutical and other industries where any
change in process (when a green chemistry based process is replacing a conventional process)
has to go through validation trials, change in documentations and filings as well as series of
approvals from internal regulatory affairs. Regulations aimed at risk prevention should be
developed as compared to risk control. The government should also revisit their existing policies,
make them favourable for green practices implementation so as to promote alternate green
chemical products and processes.
Way Forward in Sustainable Chemistry
Green Chemistry helps the companies to design new products and processes with sustainability as the
core principle. This helps the companies in improving their top and bottom line and gain competitive
advantage.
However, the industry cannot implement green chemistry and engineering practices in isolation. It is
imperative to build a collaborative ecosystem in which academia, industry, government and regulatory
bodies come together and create opportunities for the industry, academia and entrepreneurs to test,
scale-up and commercialize their ideas. Ideas or concepts with potential to solve challenges faced by the
industry in green chemistry should be nurtured and adequate support should be provided for scale-up
and commercialization. This would encourage creation of inventions and innovations in the field of green
chemistry.
By implementing green chemistry practices, companies stand to gain by first mover advantage leading to
increased revenues and profits and long term business opportunities. However the barriers faced by the
industry in green chemistry implementation highlight the fact that although the science is ready, the
industry is not. The mind-set of industry players is of key importance in successful implementation of
green chemistry.

15
References
1. India Brand Equity Foundation’s Sectorial report - August 2015
2. Report of the Sub-group on Petrochemicals for the 12th Five Year Plan
3. India Petrochemicals Industry Outlook to 2015
4. ICRA report on Indian fertilisers and Agri-Inputs Sector – August 2015
5. Press Information Bureau ,Government of India, Ministry of Chemicals and Fertilizers
6. FICCI’s report in Indian Agrochemical Industry
7. Indian Petrochemical Industry country paper from India – APIC 2015 - CPMA
8. Report of the working group on fertilizer industry for the 12th plan(FY13-FY17)
9. Indiachem report on Indian chemicals and petrochemicals sector, 2015
10. Chemicals & Petrochemicals statistics at a glance : 2015
11. Economic Times and Business Standard’s articles
12. CRISIL’s report on Indian agrochemical sector
13. India Brand Equity Foundation’s report on Indian Inorganic chemicals
14. A brief report on Chemical and Petrochemical Industry in India – April 2015
15. Report by Dept. of Fertilizers, Ministry of Chemicals and Fertilizers, Government of India - Indian
Fertilizer Scenario
16. CRISIL’s report on “Demand for non-urea fertilisers to improve gradually”
17. Planning commission’s report on Indian Chemical Industry; Five Year Plan 2012-17
18. Previous reports by TATA Strategic Management Group

16
About Tata Strategic
Our Offerings
Founded in 1991 as a division of Tata Industries
Ltd, Tata Strategic Management Group is the
largest Indian own management consulting firm.
It has a 50 member strong consulting team
supported by a panel of domain experts. Tata
Strategic has undertaken 1000+ engagements,
with over 300 clients, across countries and
sectors.
It has a growing client base outside India with
increasing presence outside the Tata Group. A
majority of revenues now come from outside the
group and more than 20% revenues from clients
outside India.
Tata Strategic offers a comprehensive range of
solutions covering Direction Setting, Driving
Strategic Initiatives and Implementation
Support.

17
Tata Strategic Contacts
Report co-authored by Nihaal Jelkie, Associate Consultant (nihaal.jelkie@tsmg.com) and
Manish Ratna, Business Analyst (manish.ratna@tsmg.com).
Manish Panchal
Sr. Practice Head – Chemicals, Energy & Logistics
E-mail: manish.panchal@tsmg.com
Phone: +91 22 6637 6713

18
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