EU plays safe

Proposed EU law has mixed implications for India

Published: Wednesday 15 September 2004

the question of whether India can manage the production of harmful chemicals sustainably has cropped up due to a recent developemnt in Europe. The eu has proposed its chemical regulation, reach, an acronym for registration, evaluation and authorisation of chemicals. The draft legislation, awaiting the approval of the eu parliament and the eu Council of Member States, will make exports of chemicals to the eu market more difficult. It would also displace production of some extremely harmful chemicals to developing countries like India, which have the capacity to manufacture chemicals.

The proposed law would require about 30,000 chemicals in the eu market to be registered. This means manufacturers and importers would have to submit information to prove that they are managing their chemicals safely. This might "become a non-tariff barrier" and affect India's exports to the region, according to S N Singh, president, Indian Chemical Manufacturers Association (icma). The eu, however, claims that since its law does not discriminate between domestic producers and importers, it does not violate the World Trade Organisation's laws.

Nearly 20,000 chemicals that would need to be registered are produced or imported in volumes ranging between one-ten tonnes a year. They would have to be registered within 11 years from when the new law enters into force. The shortest deadline for registration (three years) would apply to substances sold in excess of 1,000 tonnes a year, and those considered carcinogenic, mutagenic or toxic to reproduction (cmr) sold in excess of one tonne a year.

The regulation would cost the industry about 2.3 billion Euros. This could stop the production of one to two per cent of more than 100,000 substances in the eu market, shifting some to India. In this sense, reach is an opportunity for Indian manufacturers, says Ravi Sinha, former chief executive officer of srf Limited, a chemical and industrial synthetics and fabrics manufacturer. However, an icma official feels it is just "data generation" that could shift here. But given the fact that the shortest deadline is for some of the most harmful chemicals, the possible early shift of their production to India raises many issues.

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