export potential of sustainable goods & services considering environmental issues

8/3/2019 Export Potential of Sustainable Goods & Services Considering Environmental Issues

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EXPORT POTENTIAL OF SUSTAINABLE GOODS & SERVICES

CONSIDERING ENVIRONMENTALISSUES*

Mohammed Saqib

[email protected]

*The views presented here do not necessarily reflect the views of the Foundation, its officers,

staff, or trustee.

Fellow, Rajiv Gandhi Institute for Contemporary Studies, Rajiv Gandhi Foundation, New Delhi.Author is grateful for the support provided by Sejal Worah, Dennis Palmin and Rajesh Sehgal of WWF.


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TABLE OF CONTENTS

1.Executive Summary 4Purpose and Scope 4

Sample Base 5

Key Findings 6

Ranking of States 7

2.Background Study 10Overview 10

Socio-Economic P ressure 11

Environmenta l Norms: State-wise Explanation 20

Rising Trade and Export Scenario 27

3.The Approach: Methodology 344.Primary Findings 39

EPCs and Industry Associations 41

Indian Companies and Sustainability Process 71

Case Studies: Model Companies 117

5. Recommendation and Conclusions 146

Recommendation 147Conclusions 148

Appendix

List of RespondentsQuestionnaires


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EX ECU T I V E SU MM A RY 0 1

EXPORT POTENTIAL OF SUSTAINABLE GOODS & SERVICES

CONSIDERING ENVIRONMENTAL ISSUES

PURPOSE AND SCOPE:

The main objectives of the research were classified as:

Identifying various companies in different states who are promoting

sustainable development of goods and services.

Understanding importance of environmental issues in trade and

investment.

Understanding degree of inclination of Indian organizations in 6

industrial sectors towards Corporate Social Responsibility and their

involvement towards environmental considerations.

Finding out the ranks of states of India on the basis of their pro-

activeness in promotion of sustainable good and services.

Finding growth in exports of Sustainable goods and services and

thereby understanding its impact on companys market share.

Look into the environmental-friendly business practices that the

companies in various sectors encourage.


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SAMPLE BASE:

For conducting the study, various companies in 6 specific sectors were

identified and their top level managers interviewed. To gain deep insights

into the pro-activeness of different states in India, many industry experts,

members of associations and councils were interviewed. The sample break

up was:

SECTOR SAMPLE CITY

IT 30Chennai, Bangalore

& HyderabadAuto Components 20 Gurgaon, Pune

Steel 5Jamshedpur, Delhi,

Mumbai,

Finance 5 Mumbai & Delhi

Construction (Consultancy) 5 Mumbai & Delhi

Energy Equipment Manufacturers 5 Mumbai & Delhi

Industry Associations & Councils 13 Delhi

Total respondents 83

Separate discussion guidelines/questionnaires were developed for the

organizations and industry associations and export promotion councils. The

distribution of sample was selected in consultation with the client across

India.

The list of companies, associations and councils interviewed for the study arementioned in the Annexure.


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KEY FINDINGS:

India is one of the fastest growing economies of the world and will play

a major role in future. The huge population which was a burden until

few years ago is presently its biggest asset. However this asset is

putting a tremendous pressure on the natural resources and bio-

diversity of the country.

Industries are slowly shifting towards production and export of

sustainable goods and services but the rate is quite slow.

Developing countries like India, where most of the resources are spentin meeting the daily needs and where the competition is so high even

at the grass root level, the companies think that they dont have the

luxury to concentrate too much on environmental considerations.

According to most of the sectors, India has a deficit of the required

resources and the available resources are also not efficiently used.

This is one of the biggest concerns for the country.

The government has still not been able to fix a benchmark for all the

sectors regarding environmental regulations that need to be followed.

Sectors like finance and IT have been facing problems with an

improper benchmark to follow.

Technologies to reduce environmental pollution are very expensive for

most of the companies.

Karnataka, Maharashtra and Delhi have been ranked as top three

regions which are proactive towards environment.

Majority of the companies across India follow Environmental norms as

it is mandatory while dealing with international clients.

Only few companies were of the view that considering environmental

issues helps them to deliver value to their stake holder groups.


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RANKING OF STATES:

Effective management of resources requires participation by all stakeholders.

At the local level, strengthening democratic institutions generally leads to

better and more sustained management of natural resources. Sustainable

development is achieved through optimizing gains from several variables,

rather than maximizing those from a single one. This requires government

departments, by convention sectorally organized, to work together, or in

some cases as a single multi-disciplinary authority. The governance must be

strengthened for sustainable development at local, national and international

level.

Thus, the study found the level of pro-activeness of separate regions of the

state. For this purpose, the councils and industry associations in India were

asked to rank the regions of India on the basis of the degree of inclination

towards environmental issues and sustainable development.

On analyzing the data collected from 10 councils and associations of India, it

can be seen that Karnataka is the leader occupying the top slot. This is

followed by Maharashtra and Delhi NCR. The top regions in India as per

Council and Industry Associations perception are mentioned in the table

below:

RANK STATES

1 KARNATAKA

2 MAHARASHTRA

3 DELHI / NCR

4 GUJARAT

5 TAMIL NADU

6 ANDHRA PRADESH

7 UTTAR PRADESH

8 HARYANA

9 WEST BENGAL


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BACKGROUN D STUDY 0 2

India is the 7th largest country of the world with an area of 3.29 million sq

km. It is one of the densely populated countries of the world with a

population of over 1 billion. Though agriculture contributes less than 24% of

the GDP, it employs the maximum working population of the country. The

economy is growing at a rate of over 8%. India a nuclear power is

considered as one of the fastest growing markets of the world.

For India, a large country both populated and poor, to develop in an

environmentally sustainable development is not an option but a requirement.

On one hand, India is faced with environmental degradation from poverty

and population pressures, and on the other, from pollution from increased

activities due to economic growth and the consequent change in consumption

patterns. While the poor depends on the environment for their livelihood, the

process of economic development relies on using natural resources to

SUSTAINABLE

DEVELOPMENT IN INDIA

SUSTAINABLE DEVELOPMENTSTANDS ON THREE PILLARS:ECONOMIC, SOCIAL ANDENVIRONMENTAL.

SOCIO-ECONOMIC PRESSURES ON THE ENVIRONMENT

POLLUTION NORMS OF STATES

RISING TRADE & EXPORT SCENARIO


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produce goods and services. The waste generated from consuming and

producing these goods and services are in turn released back into the

environment impacting it. The environment provides security for present and

future generations, the health of the environment is closely connected with

the health of humans, and it is economically beneficial for countries to

prevent environmental degradation. The challenge therefore, in making

development compatible with the environment is to restructure the economic

system in a way that it will not destroy the environment as economic

progress continues.

Sustainable development attempts to strike a balance between the demands

of the economic development and the need for the protection of the

environment. A better explanation of the term can be explained by the Venn-

diagram:

Source: en.wikipedia.org/wiki/Sustainable_development


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Environmental sustainability is

defined as the ability of the

environment to continue to

function properly indefinitely.

The goal of environmental

sustainability is to minimize

environmental degradation, and

to halt and reverse the

rocesses the lead to*.

SUSTAINABLE DEVELOPMENT CONSIDERING ENVIRONMENTALISSUES: AN OVERVIEW

Sustainable Developmentas defined by

Brundtland Commission, is "the meeting of

the needs of the present without

compromising the ability of future

generations to meet their own needs". A

rapidly changing population resource equation,

in the face of poverty, and lack of resources

create formidable social and environmental

problems at national and global levels. Thus,Environment Sustainability in this context:

Consumption of renew able State of environment Sustainability

More than nature's ability to replenish Environmental degradation Not sustainable

Equal to nature's ability to replenish Environmental equilibrium Steady-state

Sustainability

Less than nature's ability to replenish Environmental renewal Sustainable development

Table: Indias Development I ndicators

Indicator Value

Human Development Index 2003 (rank) 0.602 (127)

Human Poverty Index 2003 (rank) 31.3% (58)

Environmental Sustainability Index 2005 * 45.2 (101)

GHG Emissions 1994 1,228,540 Giga gram per year; 1.3

tons per capita

GDP and GDP per capita (2002-03) Rs. 36480 billion, Rs. 29382 per

year.

*Source: http//www.yale.edu/esi/


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As India has only 2.4% of the

worlds total landmass, the

population density is at 324

persons per square kilometer

(Census 2001) and pressures

on the environment are

correspondingly high.

SOCIO-ECONOMIC PRESSURE OF SUSTAINABLE DEVELOPMENT WITH

SPECIAL EMPHASIS ON ENVIRONMENT IN CONTEXT OF INDIA

Sustainable development receives various pressures on various grounds

which can be summarized under the following heads:

The key socio-economic pressures on the environment such as population,

poverty, illiteracy, economic growth, changing consumption patterns,

deforestation, biodiversity, air and water pollution, climatic change and

trends of urbanization pose pressure on India forsustainable development.

2.1(a) P opulation

India, the second largest populous country, is home to

over 16 percent of worlds population while

accounting for only 2.42 per cent of the total world

area. By the year 2025 Indian population may cross1.4 billion. Demographic growth of such dimension

creates enormous pressure on environmental resource

base and ecosystems. It will cause serious socio-

economic problems and will necessitate breaking from

the businesses-usual scenario. The significance of

population pressure is great as it impedes both

development and environmental health.


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2.1(b) Deforestation

India has very diverse forest vegetation recording an area of76.52 million

hectors - 23.3 per cent of the total geographical area - while the actual

forest cover is 63.3 million hectares - only 19.3 per cent of the total land

area of which only 11.2 per cent of the area has forest with a crown density

of greater than 40% .

Pristine, untouched prime forests of the country have

steadily declined and are estimated to be not more

than 3% of the countrys land area, reflecting a

qualitative decline of the forests in the country. The

forest wealth is dwindling due to:

Illicit tree felling

Overgrazing

Encroachments

Forest fires

Ind iscriminate execution of development

projects in the forest areas.

2.1(c) Biodiversity

Biodiversity, an essential component of our life support system, is a

collective term that encompasses the variety of all-living organisms - plants,

animals, micro-organisms on the earth who act collectively in the functioning

of nature and in maintaining ecological balance.

As India has only 2.4% of the

worlds total landmass, the

population density is at 324

persons per square kilometer

(Census 2001) and pressures

on the environment are

correspondingly high.


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India is one of the twelve mega-diversity centres in the world with 46,000

plants and8,000 animal species. With only 2.4 per cent of the worlds

land area, Indian biodiversity contributes 8% of the known global

biodiversity. However, our biodiversity is under increasing threat from

Habitat loss

Reckless over-exploitation

Trade in w ildlife products

Poaching

Smuggling

According to estimates over 1500 plant species, about 79 mammals, 44

birds, 15 reptiles, 3 amphib ians and several insects are endangered

species.

2.1(d) Land and soil degradation

Out of the total Indian geographical area of 329 million hectare, 175

million hectare is considered degraded. Degradation is primarily caused

through erosion by wind and water. Increased silt load leads to speedy

deposition of silt in the dams and reservoirs. Increased emphasis on

intensive agriculture and over irrigation has resulted in water logging and

reduction in the quality of the fertile areas of the country.

2.1(e) Fresh water

As populations grow and water use per person rises, demand for fresh water

soars. But the supply of fresh water is finite and threatened by pollution.

Evidence of water stress can be seen, as rivers are drained dry.

In many parts of the country polluted water, improper waste disposal, and

poor water management causes serious public health problems. Water levels

are falling in every state particularly over large parts of Punjab and

Haryana due to excessive abstraction of irrigation. In the coastal belt of the

country groundwater is becoming progressively saline due to salt-water


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intrusion. Access to safe drinking water, thus remains an urgent need for the

public and a headache for the governing bodies. 85 per cent of the

population in the urban areas and 79 per cent in rural areas still do not

have access to safe drinking water.

2.1(f) Energy

Indias energy development programme has been put to severe pressure

with the ever increasing demand supply gap and mismatch of resources

coupled with non-uniform growth curve. The challenge faced by India in the

management and development of the power sector is multi-dimensional and

they stem fundamentally from the following:-

Increase in demand for energy due to rapid industrialization and growing

population.

Constraint of financial resources for enhancing this infrastructure facility.

Limited reserves of coal and fossil fuels and consequent burden on foreign

exchange due to increasing imports.

Increased emphasis needs to be paid to promote energy efficiency as well as

to develop renewable energy resources for promoting sustainable

development.

Economic Burden due to Energy, Water, Sanitation and Hea lth Problems per year.Source: Parikh J et.al, 2002

Energy (a) Water (b) Total(a+b)

W orking day spent in fuel and w ater collection and w ork days lost due to ill

health ( Rs. Millions)I No. of adult working days spent in fuel

wood gathering and water collection2950 11519.7 14469.7

II Adult working days lost due to diseases 833(Respiratory &Eye related)

1268 (Water &Sanitationrelated)

2101

Direct expend iture on he alth by ad ults ( Rs. Billions)III Expenditure on health by adults due to

diseases66.56(Respiratory & Eye related)

32(Water &Sanitationrelated)

98.56

Total economic loss due to improperenergy and water facilities and due tohealth impacts or their procurement &use

293.54 799.26 1092 .8


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The socio-economic costsof water pollution areextremely high: 1.5million children under 5yrs age die each yr. due

to water related diseases,200 million person days ofwork are lost and thecountry loses aboutRs.36,000 crores each yr.Given this, we must aimat water security forpresent and futuregenerations, make wateravailable to all andpreserve its quality.

2.1(g) Air pol lution

Air pollution has been growing since the economic development gained

momentum. Rapid industrialization, escalating cities and greater dependence

on fossil fuels have contributed to the growing menace. Vehicular traffic is

the most important source of pollution in all the mega cities. The most

prevalent form of air pollution is a high level of Suspended Particulate Matter

(SPM), high concentration of Sulphur dioxide (SO2) and CO2 which occur in

about 20 per cent of the cities.

Air pollution in India is worsening by the day, as many urban areas are

becoming lethal gas chambers. Delhi, the capital city, is globally the fourth

most polluted city. The exceptional surge in the number of vehicles accounts

for approximately 64% of the total pollution load of Delhi. The situation in

other cities and towns is no better.

2.1(h) W ater pollution

Water-water every where but not a drop to drink.

Drinking Water is slowly turning from a renewable source

to a non-renewable one. The major causes for this

change have been:

Urbanization

Industrialization

Over withdrawal of water

Agricultural run-off

Public apathy


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Water Availability

3450

1288 1250

760

1951 1991 1999 2050Year

C

u.m

/person/year

UTILIZABLE WATER PER CAPITA ISDECREASING* This level of pollution is set to createconflict over water and scarcity even

in regions with abundant water (TERI

vision, 2001). Water per capita would

decrease to 760 by 2050**.

The major water polluting industries

include fertilizers, refineries, pulp &

paper, leather, metal plating and other

chemical industries.

Most of

the Indian water bodies are heavily polluted

with large stretches of most of our rivers

having water that is unsafe for drinking

purpose. With rapid urbanization and

industrialization huge quantities of waste

water enters rivers. The Ministry of Water

Resources, September 2007 report on

artificial recharge of ground water stated that out of a total of 5723

assessment units (Blocks/Mandals/Talukas) in the country, 839 have been

categorized as Overexploited, with ground water extraction in excess of the

net annual recharge. There are also 226 Critical assessment units where

the ground water draft is between 90 and 100 percent of the annual

replenishment, apart from 30 blocks having only saline ground water. Our

facilities to treat wastewater are woefully inadequate. In class I cities, only

5% of the total wastewater is collected of which only 25% is treated. More

than half the cities have no sewage system.

**Source:Central Water Commission (CWC) 1998, Water Statistics of India, Delhi,

India: Central Water Commission.

84%

12%

4%

Water Use

Agriculture

Industry

Domestic


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2.1 (i) Solid w astes

In India, the current per capita waste generation is very low vis--visadvanced countries, though the actual quantum of waste is large owing to

enormous size of our population. In actual quantum, plastic waste alone has

increased tremendously over the last few years.

The mode of waste disposal predominantly remains through land filling, a

conventional but unhygienic method. Alternative modes like composting and

other scientific approaches are sparsely used. An inadequate collection and

disposal of such wastes, pollutes and degrades land and water resources

besides being a health hazard.

2.1 (j) Urban trap

The population in Indian cities is growing at twice the rate of the average

growth of the countrys population. India may be a rural country but it has

one of the worlds largest urban populations. The state of cities and towns is

appalling and is worsening at a rapid pace. Most basic services like cleandrinking water, sanitation, solid waste disposal, transport and health facilities

are crumbling under increasing population pressure besides inadequate

housing.

As countries industrialize one sees cities grow and traffic increase. This may

reflect rapid economic development and industrialization but also results in

high levels of energy consumption and emissions. The progress of

urbanization is relatively slow in India compared to other developingcountries and the bulk of the population continues to live in rural areas. The

urban population increased from 19% of the total population in 1965 to 28%

in 2000. It is expected that more than 50% of population in India will reside

in urban areas by 2025.

This has led to congestion of cities, proliferation of private vehicles, increased

energy usage and increased pollution. The transport sector accounts for a


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major share of consumption of petroleum products in India. Transportation

sector is responsible for a large share of air pollutants. Therefore, in order to

develop sustainably greater emphasis needs to be placed on developing good

public transport systems.

2.1 (k) Climate change

Over the last half century, carbon emissions from fossil fuel burning

expanded at nearly twice the rate of population growth, boosting

atmospheric concentrations of carbon dioxide, the principal greenhouse gas,by 30% over pre-industrial levels. Fossil fuel use accounts for roughly 3/4th

of world carbon emissions. Annual emission of carbon dioxide from industrial

countries is currently twice as high as from developing ones. Emissions from

developing countries will nearly quadruple over the next half century, while

those from industrial nations will increase by 30% , according to the

Intergovernmental Panel on Climate Change. In spite of the Climate Change

Convention adopted at the Rio-de-Janeiro in 1992, the global carbon dioxide

emission has been rising steadily. This is in sharp contrast with the Montreal

Protocol, which has received considerable success in cutting down the

emission of CFCs and other ozone destroying substances.

The situation is grave and needs to be quickly addressed before the whole

system destabilizes and leads to mass extinction.

2.1 (l) Economic Growth

Some economists say that India is shining. Over the last year the Indian

economy has shown good growth rates, low inflation rate, falling interest

rates and robust export growth. Just like poverty, economic growth also

Source: Sustainable development: Integrating economic and ecological concerns

By: C.K . V arshney


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leads to pollution, albeit of a different kind. The impact of this growth on

environment depends on three major aspects: first is the structure of GDP,

second is the change in consumption patterns of the population, and the

third is environmental governance.

Share of agriculture (bedrock of India) in the total GDP has been declining

over the years from over 50 per cent in the early 1950s to 26 percent in

recent years. At the same time the shares of manufacturing, transportation

and banking and service sectors have doubled in last 50 years (Economic

Survey 2003).

The rise in the service sector share is encouraging as it is environmentally

less intensive than the other two sectors. This change is stimulated by

liberalization and the rapidly increasing outsourcing of software and IT

enabled services by foreign companies. Some of this has to do with the

change in domestic consumption patterns as well, for instance the restaurant

industry has taken off in the last ten years employing many.


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ENVIRONMENTAL NORMS:

STATE WI SE EXPLANATI ON

The three specific Acts that are being implemented and broadly supervised

by CentralPollution Control Board (CPCB) and followed by all the State

Pollution Control Board(SPCB) are:

1. The Air (P revention & Control Of Pollution) Act, 1981:

This is an Act to provide for the prevention, control and abatement of

air pollution in the country so as to preserve the quality of air. Central

and State Boards constituted under section 3 and 4 of Water

(Prevention and Control Pollution) Act, 1974 were deemed also as

Central and State Boards for Prevention and Control of Air Pollution.

2. The Water (Prevention & Control of Pollution) Act, 1974.

[Act No. 6 Of 1974]:

This Act was enacted for prevention and control of water pollution and

maintaining or restoring of wholesomeness of water. The Central and

State Pollution Control

Boards have been constituted under section 3 and 4 of the Act

respectively. The Act was amended in 1978 and 1988 to clarify certain

ambiguities and to vest more powers in Pollution Control Board.

"Environmental problems are really social problems.

They begin with people as the cause, and end with

people as victims. They are usually born of ignorance

and apathy. It is people who create a bad environment

and a bad environment brings out the worst in people.

Man and nature need each other, and by hurting one we

wound the other......" Edmund Hillary (Ecology 2000)


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3. The Environment (Protection) Act, 1986:6

This is an Act to provide for the protection and improvement of

environment and for matters connected there with. This is comprehensive

umbrella legislation.

Salient feature are:

i) Central Govt. or any officer delegated by it has been vested

with

more powers

ii) Hazardous wastes (Management & Handling Rules), 1989 (as

amended in 2000)

iii) Hazardous chemicals (Manufacture, Storage & Import of

hazardous

Chemicals) Rules, 1989

iv) Biomedical Waste Rules 1998 (as amended)

v) Environmental Statement

One special feature of EP Act 1986 is provision of taking cognizance of

offence in court of law by any person after giving notice of 60 days to CentralGovt.

vi) Other related rules of EP Act are:

a) Manufacture Use Import Export and Storage of Genetically

Engineered

Micro-organisms or cell.

b) Scheme of labeling Environment friendly product

('ECOMARK')

c) Coastal Zones Regulation notifications i.e. to restrict certain

developmental activities along the coastal zone.

4. The Water (Prevention & Control of Po llution) Cess Act, 1977:

This is an Act to provide for the collection and levy of cess with a view to

augment the resources of Pollution Control Board.

i) The Act is applicable to all states where Water (Prevention &


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Control of Pollution) Act is in force except J & K.

ii) The cess is payable by every person carrying on any industry

and using water for various purposes as prescribed under

Schedule - II of the Act.

iii) The cess is based on water consumption, quality and purpose for

which water is used.

The various environmental regulations specific to the concerned states are as

follows:

S.NO. STATESENVIRONMENTAL NORMS

1.

UTTAR

PRADESH

Uttar Pradesh Pollution Control Board

o Prevention and Control of Environmental Pollution.o Penalty for Contravention of the Act.o Environment Impact Assessment Rules 1994.

2.

HARYANA

Haryana State Pollution Control Board (HSPCB)

o

Hazardous Wastes (Management and Handling) Rules,1989

o Bio-Medical Waste (Management and Handling) Rules,1998

o Municipal Solid Waste (Management and Handling)Rules, 2000

o Re-Cycled Plastic Manufacture & Usage Rules, 1999o Noise Pollution Rules, 2000o Manufacture, Storage and Import of Hazardous

Chemical Rules, 1989o The Environment (Protection) Rules-Emission

Standards for D. G. SE Batteries Rules, 2000


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3.

TAMILNADU

Tamil Nadu Pollution Control Board(TNPCB)

o Manufacture, Use, Import, Export and Storage of

Hazardous Micro -organism Genetically EngineeredOrganisms or Cell Rules, 1989.

o The Chemical Accidents (Emergency Planning,Preparedness and Response) Rules, 1996.

o The Recycled Plastics Manufacture and Usage Rules,1999 as amended in 2003

o The Batteries (Management & Handling) Rules, 2001

4.

ANDHRAPRADESH

Andhra Pradesh Pollution Control Board (APP CB)

o Manufacture, Storage and Import of Hazardous

Chemical Rules, 1989o Manufacture, Use, Import, Export and Storage of

Hazardous Micro-organism Genetically EngineeredOrganisms or Cell Rules, 1989.

o Coastal Regulation Zoneo Bio-Medical Waste (Management and Handling) Rules,

1998o Recycled Plastics Usage Rules, 1998 (Draft)

5.

MAHA

RAS

HTR

A

Maharashtra Pollution Control Board (MPCB)

o

Biomedical Waste (M&H) Rules, 1998

o Hazardous Waste (M&H) Rules, 2000o Municipal Solid Waste Rules, 2000

6.

GUJARAT

Gujarat P ollution Control Board (GPCB)

o The Hazardous Wastes (Management & Handling)Rules, 1989

o The Manufacture, Storage and Import of HazardousChemicals Rules, 1989

UTTAR PRADESH:

Uttar Pradesh Pollution Control Board (a statutory organization

entrusted to implement Environmental Laws and rules within the jurisdiction

of the state of Uttar Pradesh, India) looks after the pollution and


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environmental norms of the states. The various acts enacted under the

supervision of the Board are listed below:

Prevention and Control of Environmental Pollution.

Penalty for Contravention of the Act.

Environment Impact Assessment Rules 1994. IABILITY

INSURANCE

HARYANA:

Haryana State Pollution Control Board (HSPCB) performs its regulatory

duty under the supervision of Central Pollution Control Board. The Acts thatare supervised by the board are as follows:

Hazardous Wastes (Management and Handling) Rules, 1989

Bio-Medical Waste (Management and Handling) Rules, 1998

Municipal Solid Waste (Management and Handling) Rules, 2000

Re-Cycled Plastic Manufacture & Usage Rules, 1999

Noise Pollution Rules, 2000

Manufacture, Storage and Import of Hazardous Chemical Rules,

1989

The Environment (Protection) Rules-Emission Standards for D.

G. SE Batteries Rules, 2000

TAMIL NADU:

Tamil Nadu Pollution Control Board (TNPCB), established in 1982,

functions with Head Office at Chennai. The different norms followed explicitly

by the board are:

Manufacture, Use, Import, Export and Storage of Hazardous

Micro -organism Genetically Engineered Organisms or Cell

Rules, 1989.

SOURCE: 1. UTTER PRADESH POLLUTION CONTROL BOARD website: www.uppcb.com

SOURCE:

2. HARYANA STATE POLLUTION CONTROL BOARD website: www.hspcb.gov.in3. TAMIL NADU STATE POLLUTION CONTROL BOARD website: www.tnpcb.gov.in


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The Chemical Accidents (Emergency Planning, P reparedness

and Response) Rules, 1996.

The Recycled Plastics Manufacture and Usage Rules, 1999 as

amended in 2003

The Batteries (Management & Handling) Rules, 2001

The board follows all the norms followed by Haryana Pollution Control

Board except:

i) Re-Cycled Plastic Manufacture & Usage Rules, 1999

ii) The Environment (Protection) Rules-Emission Standards for

D. G. SE Batteries Rules, 2000. ***

ANDHRA PRADESH:

The Andhra Pradesh State Board for Prevention and Control of Water

Pollution was constituted on 24-01-1976. After implementation of Air

(Prevention and Control of Pollution) Act, 1981, the Boards name was

changed as Andhra Pradesh Pollution Control Board (APPCB). The

norms that are supervised by the board for the companies under this statecan be summarized as follows:

Manufacture, Storage and Import of Hazardous Chemical Rules,

1989

Manufacture, Use, Import, Export and Storage of Hazardous

Micro-organism Genetically Engineered Organisms or Cell

Rules, 1989.

Coastal Regulation Zone: Coastal Zone Management Plans of

Andhra Pradesh identifying and categorizing the coastal areas up to

500 meters from the high tide line were prepared as per the provisions

of Coastal Regulation Zone (CRZ) Notification 1991.

Bio-Medical Waste (Management and Handling) Rules, 1998

Recycled Plastics Usage Rules, 1998 (Draft).

SOURCE:


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MAHARASHTRA:

Maharastra Pollution Control Board (MPCB) is functioning under the

administrative control of Environment Department of Government of

Maharastra. The acts that are regulated by it are the same as followed by the

other states under the broad perspective of Air Act (1981), Water Act

(1974) and Environment Act (1986). Along with this there are also some

rules as mentioned for other states which are looked after by MCPB like:

I. Biomedical Waste (M&H) Rules, 1998

II. Hazardous Waste (M&H) Rules, 2000

III. Municipal Solid Waste Rules, 2000.

GUJARAT:

The Government of Gujarat constituted the Gujarat Pollution Control

Board(GPCB) on 15-10-1974 with a view to protect the environment and

to prevent and control the pollution of water in the State of Gujarat, whichoccupies a prominent niche in sustainable industrial development in the

country. Other than following the three important acts the rules that the

board supervises are as follows:

The Hazardous Wastes (Management & Handling) Rules, 1989

The Manufacture, Storage and Import of Hazardous Chemicals

Rules, 1989

4. ANDHRA PRADESH POLLUTION CONTROL BOARD website: www.appcb.org

5. MAHARASHTRA POLLUTION CONTROL BOARD website: www.mpcb.mah.in

SOURCE:

GUJARAT POLLUTION CONTROL BOARD website: www.gpcb.gov.in


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RISING TRADE AND EXPORT SCENARIO

During the larger part of the post-reform period (1993-2005), Indias pace of

export growth has not been significantly higher though it has accelerated

since 2002. In comparison to the pre-reform period (1950-90), the actualgrowth of exports in the post-reform period has been above the expectation

primarily because of growth of world demand.

The export policy introduced within the economic reforms in 1991 primarily

focuses on the exchange rate. A major element of this policy shift was the

downward adjustment in the exchange rate of the rupee against the major

currencies in July 1991. Further, in 1993, the government adopted full

convertibility of the rupee on the current account.1

Export Trends in Pre-Reform Period: Brief Overview

Exports were largely neglected during the first and the second five-year plans

(1952-1956 & 1957-1961), because there was a perception that demands for

Indian exports was inelastic. Whilst the world merchandise export was growing

at 6.3% per annum during the 1950s, Indias export stagnated (Table 1). As the

world merchandise exports expanded relatively faster during the 1960s at 8.8%

per annum, the growth rate of Indias exports improved somewhat to 3.6% per

annum. Clearly, the country failed to make the best use of the trade possibilities

available during the 1950s and 1960s. The share of Indias exports in world

exports declined sharply from 1.4% during the 1950s to 0.9% during the

1960s. In order to offset the detrimental effects of overvalued exchange rates

and other government policies on exports, various implicit and explicit measures

of export subsidization were adopted. World exports registered a hefty growth

FINDING THE PATH TO SUSTAINABLEDEVELOPMENT AND GROWTH IN INDIA: EXPORT

POTENTIAL.


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rate of 20.4 per cent per annum during the 1970s. Buoyancy of world demand

and a relatively favorable domestic policy provided a market conducive to a

rapid growth of exports from India. It results in the growth of Indias exports of

merchandise and services at the annual rate of about 18% and 27%

respectively during the 1970s. Joshi and Little (1994), while recognizing the

importance of world demand, explained that the export growth of the 1970s was

mainly due to the depreciation of the real effective exchange rate REER****,

provision of export subsidy and a relatively liberal import policy for export

production. Despite the high growth, Indias share in world merchandise exports

declined to 0.5% during the 1970s from 0.9% during the 1960s.

The growth rate of world exports turned negative in the aftermath of the second

oil price hike, which had its automatic effect on Indias exports which

decelerated sharply. During the second half of the 1980s, however, the world

economy recovered and Indias exports grew at a healthy pace of 17.8%).

According to Joshi and Little (1994), there was a genuine improvement in the

export competitiveness of India during this period due to a major depreciation of

the REER and increased export subsidies. The capital goods import also

witnessed some doses of industrial deregulation and liberalization.

****Clarification1. The system of partial convertibility introduced in 1992 established a dualexchange rate for the rupee, which allowed exporters to sell 60 per cent of theirforeign exchange in the free market and 40 per cent to the government at the lowerofficial price. The official and market exchange rates were unified with theintroduction of full convertibility.2. REER is the weighted average of a country's currency relative to an index orbasket of other major currencies adjusted for the effects of inflation. The weights aredetermined by


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Trends and Patterns of Exports in Post-Reform Period

The process of economic reforms became far more comprehensive and

systematic after a severe balance of payment crisis in 1991. Significant reforms

were witnessed in terms of removal of state controls on domestic and foreign

investment, foreign trade, prices and exchange rates. These reforms were made

with the expectation that there would be much efficient resource allocation,

greater specialization, diffusion of international knowledge and heightened

competition. But Indias export growth didnt react to such reforms in a positive

manner. It had accelerated since 2002.

The post-reform period (1993-2005) is divided into three sub-periods: 1993-97

(the period before the East Asian crisis); 1999-2001 (the period immediately

after the crisis); and 2002-05 (the period of rapid export growth).

Growth of Exports

During 1993-97, Indias merchandise exports recorded a growth rate of about

13% per annum and services exports showed a comparable growth rate of

about 14% per annum (Table 1) in spite of the appreciation of the REER by

about 1 per cent per annum. Table 2 shows that the merchandise export growth

during this period was, by and large, broad-based with double-digit growth in

most of the commodity groups. Within the services sector, the growth rate of

exports was the highest for the group miscellaneous (which includes software)

followed by insurance (Table 3). As a result of the slowdown in world demand

triggered by the crisis in east Asia, merchandise exports of India (and of the

world) in 1998 declined in absolute value from the level in the previous year,

Even in the phase of depreciation of REER of the rupee by more than 6 per cent

between 1997 and 1998. Indias exports showed signs of recovery during 1999-

2001 by growing by about 10 per cent per annum. The growth rate of

merchandise exports declined to about 7.6 per cent if petroleum (SITC 33)

exports, which skyrocketed from $ 55 million in 1999 to $ 1,929 million in


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2000 are excluded from the total. As the world economy fully recovered after

the Asian crisis, Indias merchandise exports showed a high growth rate of about

25 per cent per annum during 2002-05 (22 per cent if petroleum exports are

excluded). In particular, services exports showed exceptional performance,

growing at the rate of 45 per cent per annum. The growth was broad-based with

almost all the commodity groups (except SITC 9) and services sectors showing

double-digit growth rates (see Table 2 and Table 3). It is significant that this

high growth occurred despite the appreciation of the REER by about 1 per cent

per annum during the period. The latest (provisional) data indicates that the

growth momentum of the previous four years continued, by and large, in 2006.

The cumulative value of Indias merchandise exports during April-March 2006-07

was $ 124.6 billion (provisional) as against $ 100.6 billion (provisional) in

2005-06. The growth rate of merchandise exports in 2006-07 over the previous

year on a like to-like basis is 23.8 per cent. This has been attained in spite of

the appreciation of the REER by about 2.8 per cent during April-January of

2006-07.

In sum, Indias exports during the post-reform period have been growing fasterthan the rate of growth of world exports. This is in contrast to the pattern

observed for the pre-reform period, particularly during 1950-80. It appears that

the growth of world demand is the most important determining factor of Indias

merchandise export growth for both the pre- and post-reform periods. The

strong correlation of Indias exports with world exports during the post-reform

period is evident from the figure.


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Table 1: Indicators of Indias Export Growth, 1950-2005

( US $ millions)

Period

Average Annual Growth

Rates (a)

Indias Share in

World Exports

Averages

Indias Exports

In Goods and

Services (Per

Cent of GDP),

AveragesGoods Services (b) Goods Services

1950-59 0.22 6.30 3.78 NA 1.39 NA NA

1960-69 3.58 8.77 1.78 NA 0.90 NA 4.21

1970-79 17.97 20.41 26.61 NA 0.54 NA 5.20

1980-85 2.39 -0.86 3.79 0.36 0.47 0.81 6.05

1986-90 17.76 12.36 10.47 14.14 0.48 0.63 6.29

1993-97 13.30 10.56 14.10 9.22 0.60 0.59 10.50

1999-01 10.26 4.09 9.52 3.07 0.66 1.07 12.52

2002-05 25.29 17.58 45.36 15.16 0.81 1.64 17.19(c)

Notes

A: Growth rates are calculated using semi-logarithmic regressions.

B: Services represent commercial services excluding government services.

C: Exports (per cent of GDP) for the year 2005 was extrapolated based on the

trend for the previous three years (the average for 2002-04 was 16.08).

Source: Data on merchandise exports (for 1950-2005) and services exports

(from 1980-2005) have been accessed from the WTO website; Indias services

exports for 1950-79 are from the RBI; Exports of goods and services (per cent

of GDP) are taken from the World Development Indicators database, World

Bank.


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Table 2: Indias Merchandise Exports across Commodity Groups,

Average Annual Growth Rates

SITC (Standard International Trade Classification)

Code Commodity Group 93-97 1999-2001 2002-05

0 Food and live animals14.42 5.92 11.44

1 Beverages and tobacco 23.44 -12.54 13.71

2 Crude materials,

inedible, except fuels 12.56 8.85 51.12

3 Mineral fuels,

lubricants and related -4.14 403.01 66.65

4 Animal and vegetable oils

and fats14.49 -16.35 23.07

5 Chemicals20.41 13.61 26.85

6. Manufactured goods classifie

chiefly by material9.70 2.74 19.27

7 Machinery and transport

equipments 17.10 22.19 35.47

8 Miscellaneous

manufactured articles9.82 5.55 20.72

9 Commodities and

transactions not

classified according to kind

17.58 26.54 -3.09

Source:COMTRADE-WITS (authors calculations). To compute the growth rates of total

exports in the last two rows, export values of SITC 33 and SITC 9 (reported in


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COMTRADE) are subtracted from the total exports (reported in WTO). The WTO data on

total exports are used so that these growth rates are comparable with the ones in Table

1.

We use the WTO data in Table 1 as it gives a longer time series (from 1948) than

COMTRADE-WITS (from 1962)

Table 3: Indias Services Exports across Sectors, Average Annual

Growth Rates

Sector 1993-9 1999-20 2002-05

Travel 7.67 1.65 33.25

Transportation 6.57 12.51 36.40

Insurance 18.26 11.66 47.22

Miscellaneous 25.99 4.26 49.81

Miscellaneous of which

softwareaNA 7.27a 35.29

Total

commercial servicesb13.96 4.83 45.59

Notes: a Value of software for the year 1999 was estimated based on the share of

software in miscellaneous in 2000 (RBI has been reporting separate data on software

exports from the year 2000 onwards).

b Exports of Government not included elsewhere (Gnie) is excluded.

Source: Reserve Bank of India

Source of report :Sources of Indias Export Growth inPre- and Post-Reform Periods by C. Veeramani


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T H E A P P R O A CH : M E T H O D O L O G Y 0 3

UNDERSTANDING THE EXPORT POTENTIALITY OF SUSTAINABLE

GOODS & SERVICES FROM I NDIA, TAKING ENVIRONMENTAL I SSUES

INTO CONSIDERATION

1a. Purpose and Scope of the Study

The prime objective of the study was to analyze the current growth scenario

of exports of sustainable goods and services and its potential in India.

Under the purview of the study, we have attempted to investigate various

players in the six industry sectors prevalent and experts from associations

and councils to understand the export potential of sustainable goods and

services considering environmental issues in the most comprehensive mode

possible. On the basis of a secondary research done at the initiation of the

study, a primary research plan was developed to understand the dynamics of

sustainable development and environmental issues in trade and investment.

The main objectives of the study include:

Identifying various companies in different states who are promoting

sustainable development of goods and services.

Understanding importance of environmental issues in trade and

investment.

Understanding degree of inclination of Indian organizations in 6

industrial sectors towards Corporate Social Responsibility and their

involvement towards environmental considerations.


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Finding out the ranks of states of India on the basis of their pro-

activeness in promotion of sustainable good and services.

Finding growth in exports of Sustainable goods and services and

thereby understanding its impact on companys market share.

Look into the environmental-friendly business practices that the

companies in various sectors encourage.

1b. Empirical Methods:

The study uses a mix of research methods to address the challenges of

limited data availability. The findings reported here are based on in-depth

interviews with various decision makers across the industry players in the

market and other members of associations and councils.

These interviews lasted for about an hour (with top level managers of

organizations and industry experts) and have been conducted over a period

of 60 days. These interviews were conducted at top level within the

organizations and members of councils, depending on the availability and

resourcefulness of the concerned person.

It was made sure that the sample chosen is the representative of the whole

industry. For the sake of simplicity and uniformity, we followed a

questionnaire to serve as a guideline for the interviews and information

obtained. The interviews focused on the agenda of their understanding about

sustainable development and tried to identify the companys involvement in

promoting export of these goods and services. The interviews were kept

partially open ended to capture as much information as possible and to boost

the exploratory nature of the research. The close ended parts were restricted

to maintain the commonality between the various respondents. Separate


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questionnaires were prepared for the different respondent groups

(Companies, Associations and Councils).

The survey tried to extract:

their understanding of sustainable development and thus find out the

degree of importance of environmental considerations for the

company.

export potential of sustainable goods and services and impact on

companys market share.

the industry trends in exports of sustainable good and services,

encouragement of environment-friendly business practices,

adherence to certifications and schemes,

compliance to environmental laws and judicial decisions,

their perspective on governments initiative to promote investments in

export of such goods and services.

We tried to get the maximum proportional coverage by covering major

sectors and experts in the industry. On the other hand, we incorporated

various angles like that of companys perception towards potential of

sustainable goods and services.


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1 c. Sample specif ication:

We covered a total of 83 respondents from the categories mentioned below:

RESPONDENTS SAMPLE SIZE CITY

INDUSTR

YSECTORS

IT 30Chennai, Bangalore &

Hyderabad

Auto Components 20 Gurgaon, Pune

Steel 5Jamshedpur, Delhi,

Mumbai,

Finance 5 Mumbai & Delhi

Construction (Consultancy) 5 Mumbai & Delhi

Energy EquipmentManufacturers

5 Mumbai & Delhi

ASS

OCIATIONS

/

COUNCILS

EPCs & I ndustryAssociations

10 Delhi

Planning Commission 1 Delhi

Ministry of Environment 1 Delhi

CPCB 1 Delhi

Total respondents 83


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EXPORT POTENTIAL OF SUSTAINABLE

GOODS & SERVICES CONSIDERING

ENVIRONMENTAL ISSUES: PART II

04 PRIM ARY FINDINGS

01 Export P romotion Council &

Industry Associations1.1 Ranking of states

1.2 Case Studies o f EPCs &

Association

02 Indian Companies & Sustainability

Process

2.1 Industrys outlook towards

sustainability: Sector-w ise

2.2 Case Studies of Model Com anies


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Abbreviations

Councils and Industry Associations

1. BAI : BUILDERS ASSOCIATION OF INDIA2. EEPC: ENGINEERING EXPORTS PROMOTION COUNCIL3. ESC: ELECTRONICS AND COMPUTER SOFTWARE EXPORT

PROMOTION COUNCIL

4. IWEA: INDIAN WIND ENERGY ASSOCIATION5. MAIT: MANUFACTURERS ASSOCIATION FOR INFORMATION

TECHNOLOGY

6. PEPCI: PROJECT EXPORTS PROMOTION COUNCIL OF INDIA7. IMTMA: INDIAN MACHINE TOOL MANUFACTURERS8. NAREDCO: NATIONAL REAL ESTATE DEVELOPMENT COUNCIL9. SIAM: SOCIETY OF INDIAN AUTOMOBILE MANUFACTURERS10.ISSDA: INDIAN STAINLESS STEEL DEVELOPMENT ASSOCIATION11.CER: COMMI SSION FOR ENERGY REDUCTION12.CDMs: CLEAN DEVELOPMENT MECHANISM


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P R I M A R Y F I N D I N GS 0 4

EXPORT POTENTIALITY OF SUSTAINABLE GOODS & SERVICES

TAKING ENVIRONMENTAL ISSUES INTO CONSIDERATION

01.EP Cs & I NDUSTR Y ASSOCI ATI ONS

1.1 RANKING OF STATES

We conducted in-depth interviews with 10 councils and industry associations.

However, when the representative of these bodies was asked to rank states

as per their pro-activeness in promoting sustainable development and

consideration of environmental issues. The response rate for this was only

60%, since some of them refused to disclose these details.

[Working Note: The average of ranks have been taken out in order to

conclude the lowest average to score to be the highest rank gained (i.e.

Karnataka scored 1.8 as an average rank from 6 councils and this being the

lowest would be ranked 1). Further there were situations where fellow men

of councils only gave ranks to 4 states out of 8 states mentioned. In case of

no response the region was ranked 9.

EPCs & INDUSTRY ASSOCIATIONS

- Ranking of states- Case Studies

INDUSTRYS OUTLOOK TOWARDS SUSTAINABILITY- Analysis of findings

- Case Studies of model companies


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The rankings given by the councils for some regions of India are shown in the

following table:

RANK STATESEPC's & INDUSTRY ASSOCIATIONS

BAI ESC IMTMA INWEA MAIT NAREDCO

1 KARNATAKA 3 1 2 3 1 1

2 MAHARASHTRA 10 5 3 2 2 3

3 DELHI / NCR 1 2 10 10 3 2

4 GUJARAT 10 10 1 4 10 10

5 TAMIL NADU 10 10 5 1 10 10

6ANDHRAPRADESH

10 3 4 10 10 10

7UTTARPRADESH

5 4 10 10 10 10

8 HARYANA 2 10 10 10 10 10

9 WEST BENGAL 4 10 10 10 10 10

Overall, Karnataka tops the chart and is most progressive region in India as

per the councils with respect to sustainable development. This is followed by

Maharashtra and Delhi NCR on 2nd and 3rd position. Some of the councils

also ranked regions like Maharashtra, Gujarat and West Bengal which were

not included in the questionnaire. Though West Bengal and Haryana have

got low ranks overall, they were ranked 4 and 2 by BAI (Builders Association

of India) alone.


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1.2 CASE STUDIES: EPCs & I NDUSTRY ASSOCIATI ONS

Established in year 1941 in Pune, Builders Association of India (BAI) has

come a long way in bringing transparency, and accountability among the

contractors in the construction industry. This institution provides a very

important insight about the ground level situation in the construction

industry.

SOURCE

BAI website

BUILDERS ASSOCIATION OF I NDIA

SECTOR-WISE ANALYSIS

BUILDERS ASSOCIATION OF INDIA

ENGINEERING EXPORTS PROMOTION COUNCIL

ELECTRONICS AND COMPUTER SOFTWAREEXPORT PROMOTION

COUNCIL

INDIAN WIND ENERGY ASSOCIATION

MANUFACTURERS ASSOCIATION FOR INFORMATION

TECHNOLOGY

PROJECT EXPORTS PROMOTION COUNCIL

SOCIETY OF INDIAN MANUFACTURERS (SIAM)

NATIONAL REAL ESTATE DEVELOPMENT COUNCIL (NARDECO)

INDIAN MACHINE TOOL MANUFACTURERS ASSOCIATIONS

INDIAN STAINLESS STEEL DEVELOPMENT ASSOCIATION


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The growth trend of sustainable goods and services is on the positive side

but the growth rate is slow. The main reason for this has been the

commercial consideration of the projects. The cost of the projects becomes

very high if environmental considerations are taken properly. However

according to Mr. S.S. Arora (Executive Officer-BAI) , now the members

are taking environmental issues seriously as these regulations are becoming

mandatory.

Also Government of India is promoting the companies which are showing

advances on the environmental front through rewards and recognition. BAI,

the associations of authorized builders in India, support their members

activities by providing them with information about various sustainable

opportunities in Indian markets. However no such information about other

markets is at hand with BAI . Also the association is actively involved in

spreading the issues of Global Warming, development of technologies

regarding efficient use of renewable sources of energy etc within its

members. In sync with that the association also encourages membercompanies to work in clusters to find energy efficient solutions. The

association is also in touch with similar foreign associations to share

knowledge about sustainable goods and services.

Mr. Arora ranked the below mentioned five states as the states which are

aggressively promoting the growth of sustainable goods and services:

RANKS STATES

1 DELHI

2 HARYANA

3 KARNATAKA

4 WEST BENGAL

5 UTTAR PRADESH


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Commentingon the achievements and scope of improvement Mr. Arora said

The Delhi Government is spreading the awareness among the

common public and corporate alike about the environmental

protection and use of renewable resources and is concerned about

the environment more than other states. Moreover Commonwealth

Games is coming up so Delhi govt. is trying to make Delhi a GREEN

CITY. All other governments should follow the footsteps of Delhi

Government. This will lead to the development of this concept all

over the country.


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Engineering Exports Promotion Council was set up in the year 1955 under the

sponsorship of Ministry of Commerce to promote exports of engineering

goods from India. It has come a long way to become the largest Export

Promotion Council with about 12000 members from amongst large corporate

houses, trading houses, medium scale Units etc. The council actively pursues

various activities with a focus on two objectives of facilitating exports of

engineering goods & services and to provide overseas buyers the true valueof the products.

The growth of engineering goods export is shown in the figure below:

(Source: www.eepc.org)

Commenting on the growth trend of sustainable goods and services in

engineering sector Mr. R. Maitra (Executive Director, EEPC) saidExport

houses have shown inclination to follow the environmental norms.

Engineering Exports has been grow ing at the rate of 25% during the

period 2002-03 to 2006-07. However, the rate of growth in

SOURCE

EEPC website. : www.eepcindia.org

10.84 61.76 488.2 833.88

3761

11553

15926

20300

1956-57 1965-66 1975-76 1985-86 1995-96 2002-03 2003-04 2005-06

Growth of Ind ian Engineering Export from 1956-57 to 2005-06(Value in US$ Million)

ENGINEERING EXPORTS PROMOTION COUNCIL


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engineering exports is expected to decline this year on account of

Rupee apprec iation against the US dollar.

Government of India presently is not providing with any incentives to the

companies as such. Engineering Export Promotion Council (EEPC) is mainly

there to help in the export of engineering goods and services. It acts like a

facilitator to the whole process and is not involved in rewarding the

companies in any ways. However EEPC support companies by providing them

with information about various sustainable opportunities in Indian as well as

foreign markets in case the companies ask for the same. Also the council is

actively involved in promoting the information about the benefits of Carbon

Trading for SME sector and how it is a good business proposition while

helping save the environmental balance within the members. The council is

also looking for the possibilities for developing Engineering clusters all over

India to work collectively towards finding energy efficient solutions. The

council is also in touch with similar foreign councils to share knowledge about

sustainable goods and services.

According to Mr. Maitra ranking the states is not within the purview ofEEPC

and so they do not evaluate different states with any ranking system.

According to him all the states are governed by the regulations of

Government of India and their respective state governments and follow a

definite policy conducive to that states capabilities.

Commenting on the achievements and scope of improvement Mr. Maitra

said There is ample scope of developing sustainable exports in India.

Special export zones are coming up in the country and w ith the SEZ

model being encouraged, India is on its way to become an export

hub of Engineering goods and services.

ELECTRONICS AND COMPUTER SOFTWARE EXPORT

PROMOTION COUNCIL


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Electronics and Computer Software Export Promotion Council was

incorporated in the year 1989 and is Indias largest electronics and IT trade

facilitation organization and is sponsored by Government of India. The

council has more than 2300 member companies all through India. The

organization has steered the industry to show a CAGR of around 33.5%

from the year 1989 to the year ending at 2006-07.*****

Fig.1 shows thecomparison of growth rate of electronic industry and the GDP growth rate of

the country.

According to Mr. S.C. Ray (Advisor-ESC) The meaning of sustainable

goods and services is not known to a large mass. So even if they are

into the production and export of these goods and services they do

not have an idea themselves. But now to survive international

competition the exporters have to follow the required environmental

SOURCE***** ESC website.

16.421.1 18.2

28.824.9

29.14.5

4.7 8.5

7.58.4

9.2

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

%G

rowth

Electronic & Software CAGR vs GDP Grow th Rate

Software Industry Grow th(% ) GDP rate


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regulations and take required certifications. So now the trend is a

grow ing one but in most cases the reason is compulsion and not self

consciousness of the exporters.

According to him Government of India do promote the companies which are

showing advances on the environmental front through rewards and

recognition but the ground situation is not as rosy as it is perceived to be.

The companies have to take ISO and CE certifications to export to the

European markets but the problem at present is that the companies have

started producing two different qualities of the same component; one for

exports to the developed economies and another for domestic market and

other developing economies.

ESC provides information to companies for export opportunities and

requirements of all electronic equipments and exchanges the concerns of

exporters with the concerned authorities of other countries. However the

council does not provide any incentives to the companies as such or promote

any collective research to develop resource efficient solutions. According toMr. Ray, the council does remain in touch with similar foreign councils to

share knowledge about sustainable goods and services. He commented that,

according to WTO rules every country when issues a directive regarding

exports or imports, it has to consult with export councils of various other

countries with which they have direct or indirect ties and their decision may

effect the trade of the those countries.

Mr. Ray informed that the council ranks the cities as electronics and

software hubs instead of ranking the states. The table below shows the

states (along with cities) which are aggressively promoting the growth of

sustainable goods and services:


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RANKS STATES

1 KARNATAKA (Bangalore)

2 DELHI/NCR (Delhi, Gurgaon & Noida)

3 ANDHRA PRADESH (Hyderabad)

4 UTTAR PRADESH (Lucknow and adjacent region)

5 MAHARASTRA (Mumbai)

Commentingon the achievements and scope of improvement Mr. Rai said

There is lot that remains to be done. The companies should go for

new technologies and R&D. The main problem is of funds that are

required to be invested. In this regard the council is encouraging

contract manufacturing. There are signs of improvement as the

number of exporters taking environment related certifications is

increasing.


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Wind energy is one of the forms of renewable energy and is currently the

fastest growing renewable power source. There has been a twelve-fold

increase in the use of wind as a source of energy over the last ten years.

Indian Wind Energy Association was set up as a non-profit making

organization in the year 2002 with a mission to promote and spread

awareness about the benefits of wind energy and the crucial role it can play

in ensuring a sustainable path for the countrys economic and socialdevelopment. The association has more than 250 members and the

association is also a member of various national and international

associations like World Wind Energy Association, FICCI, and CII etc.

Commenting on the growth trend of wind energy sector Mr. Rakesh Kakkar

(Executive Director, INWEA) said This sector has the potential of

generating electricity to the limit of 65000 MW with the support of

technology available at present. The installed capacity of wind

energy has grown rapidly in the last three years and stood at 7660

MW as on 30th September 2007 .

Mr. Kakkar said that government extends various benefits to companies

which harness renewable sources of energy. Under section 80-IA of

income tax act these companies are exempted from tax for 10 years.

Apart from this wind energy plants also get 80% accelerated

depreciation in the first year. However the association does not provide

any incentives or rewards as such to the company. The country is still not in

a position to export wind energy to other countries but the association does

take up the issue of expanding wind energy capacity of the country with the

government. INWEA conduct its own research for development of wind sector

SOURCE INWEA website. : www.inwea.org

INDIAN WI ND ENERGY ASSOCIATION


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in India. The company tries to create awareness about the potential of wind

energy in India through their magazines, websites and conferences. The

association also targets large organizations like Railways to use wind energy

for their captive use.

According to Mr. Kakkar wind energy is still not exported to other countries

but he did ranked states based on their installed capacity as:

RANKS STATES

1 TAMIL NADU

2 MAHARASHTRA

3 KARNATAKA

4 GUJRAT

5 RAJASTHAN

On the scope of improvement Mr. Kakkar said There is ample scope for

India to become a major player in this sector in future. Still only

about 12% of the total potential is being used in the country.


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Manufacturers Association for Information Technology is the

association of IT players of the country and represents 92% of the Hardware

Sector (by turnover). It was set up in the year 1982 with few objectives in

mind. They were:

Develop a globally competitive Indian IT Industry.

Promote usage of IT in India.

Strengthen the role of IT in National Economic Development.

Promote business through International alliances.

Promote quality consciousness in the IT industry.

Transform the Indian IT industry into World Scale Industry leading to a

World Class Usage and thus a World Size Market.

Commenting on the growth trend of sustainable goods and services in

engineering sector Mr. Vinnie Mehta (Executive Director, MAIT) said

The concept of sustainable goods & services in I T hardware industry

is very new. There is not much focus on exports. This can be seen

from the fact that a $7 billion market has only 15% of the turnover

as exports. Also in IT industry 10% of the companies hold 60% of

the market share. In India presently the problem is mainly of end if

the life cycle e-waste management. India is doing its bit for efficient

e-waste management but the problem is that the majority of this

sector is unorgan ized.

Government of India presently is not providing with any incentives to the

companies as such. Mr. Mehta commented that Manufacturers Association

for Information Technology (MAIT) presently does not provide any incentives

to companies for e-waste management but it intends to provide recognition

to the companies which promote environment friendly practices in future.

SOURCE MAIT website. : www.mait.com

MANUFACTURERS ASSOCIATION FOR I NFORMATI ON TECHNOLOGY


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so that company can know the minimum which is expected from

them.


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Project Exports is a reflection of the technological capabilities of a country. It

can be divided into four broad categories as:

Civil Construction.

Turnkey Modules.

Consultancy Services.

Supplies, primarily of capital goods and industrial manufactures.

Project Exports Promotion Council was formed in the year 1984 with a vision

to promote project exports in engineering construction projects, turnkey

engineering projects and consultancy & other engineering services from

India. The council provides necessary technical information, guidance and

support to Indian construction and process engineering contractors and

consultants in public or private sector to set up overseas projects.

The target market of India revolves mainly around Asia-Pacific Region and

South East Asia.

The sectoral composition of the project exports is shown in figureas follows:

(Source: Presentation on

EXIM Bank, FICCI Banking

Conclave, Kolkata,

21/07/2006)

Commenting on the growth

trend of sustainable goods and

services in engineering sector

SOURCE PEPC website. : www.projectexports.com

PROJECT EXPORTS PROMOTION COUNCIL

22%

32%16%

4%

26%

% Composition of Project Exports

Civil Construction

Pow er Generation

Power Transmission

Consultancy Services

Others


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Mr. K. Bhushan said Indian companies have shown capabilities to

secure contracts in India at international conditions but they have

not been able to replicate this show in the international market. The

growth trend is positive in the domestic market but same cannot be

commented for overseas market.

Project Exports Promotion Council (PEPC) mainly acts as an overseas

construction council of India to help establish projects outside. It is not

involved in rewarding the companies in any ways. Moreover environmental

norms are mandatory while taking projects in foreign land. The respondent

was also unable to comment on the benefits provided by the Government to

the companies which adhere to environmental norms. PEPC do provide

information about various sustainable opportunities in foreign markets to the

companies. The council does not fund any researches by the company to find

energy efficient solutions but do encourage companies to work collectively

towards finding energy efficient solutions. The council is also in touch with

similar foreign councils to share knowledge about sustainable goods and

services.

According to Mr. Bhushan ranking the states is not within the purview of

PEPC and so they do not evaluate different states with any ranking system.

Commentingon the achievements and scope of improvement Mr. Bhushan

said There is ample scope for India to become a leader in project

management across the nations. There is no dearth of brain in India.

Only a systematic approach w ith long term goals is what is needed.

Few steps were recommended by him. He commented that SAARC

countries need to be targeted. Small companies should be Joint

Venturing with the big giants to be able to participate in the Mega

projects. Also scope of improvement is there in BOT mechanism

(Build Operate and Transfer).


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SOCIETY OF INDIAN MANUFACTURERS (SIAM)


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Society of Indian Automobile Manufacturers (SIAM) is the apex Industry body

representing 38 leading vehicle and vehicular engine manufacturers in India.

SIAM is an important channel of communication for the Automobile Industry

with the Government, National and International organizations. The Society

works closely withy all the concerned stake holders and actively participates

in formulation of rules, regulations and policies related to the Automobile

Industry.

In the words of the respondent, K.K.Gandhi, The growth trend of sustainable

goods & services in automobile manufacturing industry is very encouraging.

The figure below substantiates the statement given by Mr. Gandhi. According

to the figure, over the years exports percentage out of the total production

of automobile vehicles is increasing. The trend line in the diagram explains

the future situation and the R2 value proves its authenticity with 97%

confidence.

y = 1.122x - 2241.R = 0 .974

0

1

2

34

5

6

7

8

9

10

2000 2001 2002 2003 2004 2005 2006 2007ExportasapercentageofTotal

Produ

ction

Time Scale

Export (no. of vehicles) as a percentage of Total P roduction (no. of

vehicles) in the Automobile Sector in India

Export as a percentage of vehicle

Linear (Export as a percentage of vehicle)


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The automobile companies do not receive any monitory assistance from the

Govt. on the environment frontier. They just follow the environment norms

as mandatory and to some extent as market driven incentives. Moreover

there are no special incentives for the companies having ISO 14001.

Central Motor Vehicles rules 1989- Technical Standing Committee (CMVR-

TSC) have its representatives from SIAM. The committee advises The

Ministry of Shipping, Road Transport & Highways (MoSRT&H) on various

technical aspects related to CMVR. SIAM in turn delivers the required

information to its member companies. Along with that they also update the

industry players about foreign rules like various agreements issued by United

Nations Economic Commission for Europe (UNECE) regulations.

The companies put serious effort to make their products at par with the

world standard. Hence they have to make significant investment in the

research and development. It is worth mentioning in this regard that the

companies who invest sincerely in the R & D get monitory benefits from the

Govt. and SIAM being a part of CMVR-TSC also put their voice in this issue.

The association makes various moves to prove themselves as a pro-active

organization in organizing and attending environment related seminars and

programme. Hence they can make the companies aware about environment

related information. The various programmes can be summarized as follows:

SIAM Annual Convention 2007: Implementing Automotive Mission Plan

2006-16 - Ensuring Sustainable Growth is this years them for the annual

convention of the Society of Indian Automobile Manufacturers

SAFE Annual Convention 2007: It is an initiative from the central and

the state governments. Private sector and non-government organization

to translate into reality the theme for the convention Riding the Roads:

To a Safer and Greener Tomorrow. The objective of the seminar is to


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bring the experts, policy maker and all the stakeholders to exchange best

practices.

NATI ONAL REAL ESTATE DEVELOPMENT COUNCIL (NAREDCO)


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National Real Estate Development Council (NAREDCO) is an apex self

regulatory body of real estate and allied sectors. It was established in the

year 1998 under the tutelage of Union Ministry of Housing & Urban Poverty

Alleviation.

Brigadier Singh (Senior Executive-Environment) from NAREDCO representing

their industry stated that the real estate sector has recorded a sustained

growth in the last few years owing to a surging economy and heavy inflows

of FDI into Indian Real Estate market. The major players in this sector have

to follow certain environment specific norms for getting investments for their

projects. According to him since the industry has shown incredible growth in

the last couple of years and is now in public focus so the companies are

taking extra care in following all the norms.

According to the respondent the Govt. of India do provide tax subsidy to

companies under Section 80-IA. The council does not provide incentives to

the companies but do take on issues concerning the sector with the relevant

ministry. Moreover the required environmental standards need to be followed

by the companies to operate in the market.

The council is very pro-active in developing the sector into a contributing

sector towards the development of Indian economy. For this they organize

seminars, exhibitions, conventions and publish journals in this regard. They

also provide information about various opportunities to the member

companies. The council is also carrying out a project along with CRISIL to

rate real estate developers and projects. The association takes these types of

initiatives to make its member companies more informative about various

related issues. Also the council exchange information with similar councils

from Serbia, Dubai etc.


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It can be mentioned that NAREDCO is also associated with the project of

Green Building. The Green Building value chain is shown in the figure as:

(Source: www.greenbusinesscentre.com)

The performance of NAREDCO in making the members and other similar

organization is worth mentioning. NAREDCO collectively with BAI (Builders

Association of India) and ICCTAS (Indian Council of Ceramic Tiles & Sanitary

ware) conducted an exhibition on A good home idea.******

The state wise performance in the context of export of sustainable goods and

services can be ranked as follows:

SOURCE******

www.naredco.org


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STATE RANKING

Delhi 2

Uttar Pradesh -

Haryana -

Karnataka 1

Tamil Nadu -

Andhra Pradesh -

Gujarat -

Maharashtra 3

Commenting on the achievements and scope of improvement Brig. Singh

said Many developments have taken place in the recent years. Use of

various hazardous materials are now restricted. But a lot need to be done in

the future. Parameters need to be laid down and their implementation

process should be reviewed on a regular basis so that the measures are

successful.

INDIAN MACHINE TOOL MANUFACTURERS ASSOCIATION (IMTMA)


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IMTMA is an apex body of the machine tool industry. It was established halfthe century ago with the motive of promotional activity for the industry. At

present it represent over 300 companies from both, the public and private

sectors, manufacturing a wide range of metal-cutting and metal-forming

machines, cutting tools, accessories and other ancillary equipments.

Mr. Pundle from IMTMA represents their industry as the producer of

sustainable goods. It creates least amount of hazardous waste and almost

every product of this industry are m

export potential of sustainable goods & services considering environmental issues

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