The protection racket

Published: Tuesday 15 November 1994

A RECENT study conducted by the Indira Gandhi Institute of Development Research in Bombay shows that about 60 per cent of Indian exports go to the industrialised countries. This should be cause for immediate, close attention for anyone who is familiar with the growing trends in the environmental standards of internationally traded goods.

This is because these countries, most of who are members of the Organisation of Economic Cooperation and Development (OECD), are integrating environmental concerns into their import regimes. The ramifications of this step for countries like India, to say the least, are tremendous: for one, a large part of Indian exports are from the natural resources sector and these are directly in the line of fire. Other industrial exports like textiles, leather goods, chemicals and pharmaceuticals are also under increasing, ruthless pressure. Some of these strictures might be generated by the desire to protect business interests in the importing countries and might even be both cause and outcome of international trading rivalries. Notwithstanding this detail, it is time that the Indian government and industry faced up to the unpleasant truth that industrial and commercial activities in general are conducted in this country with scant regard for their environmental fallouts.

It is the virtually official negation of this grim reality that has prevented Indian industry from preparing and implementing a comprehensive blueprint to tackle the no-holds-barred challenge of competing in the international market without seriously jeopardising the precarious state of the Indian environment. Needless to say, the government's reaction has been strictly ad hoc; as a result, even as there are signs of trade-related environmental measures being squeezed under GATT's bulky shadow, the Indian government has no clear strategy of what interventions, if any, it will make in the debate.

But then this is nothing new: this is how the official response to most international problems has generally been in India. What is imperative, however, is for the Indian industry and business community to pay attention to the sign on the wall and clean up their acts before their business starts going down the drain.

Take, for instance, the textiles sector, which accounts for about 35 per cent of Indian exports. Already, 80-odd chemicals used in various stages of textile processing in India are on the list of hazardous items that must be phased out in the next few years -- these comprise in part of chemicals that are used in various stages of garments production, including pesticides used in cotton cultivation.

Even then, this may just be the beginning of the beginning of an era of environmental responsibility, as the German investigation of about 8,000 chemicals for their possible harmful effects suggests. While Indian rice exports to countries like the United Kingdom and Canada are facing an uncertain future because of their near-threshold pesticide content, Indian exports of sesame to the United States and Japan have already plunged substantially because of the toxic chemicals they allegedly contain. The list of such items looks set to swell in the next few years.

However, some industrial sectors have shown that Indian industry can overcome these problems and compete well in the global markets. The notable case is that of the leather industry, which came under pressure in the mid-'80s to reduce its heavy metal and toxic chemical contents. But the challenge was taken up in right earnest by several industrial units, which soon came up with leather products that met international norms. Such possibilities exist in many other industrial sectors as well, and while it may not be affordable for many small entrepreneurs to invest in cleaner production technologies, it is also true that there is enough room for improving efficiency in many of these sectors; the improved efficiency can certainly go some of the way, at least, in offsetting the extra costs. On the other hand, a joint initiative by the industry and government is also necessary to blunt the shrapnel from unfair trade practices and rivalries being blown through India in the green garb of environmental norms. However, all this is possible only if industry and the government realise the true implications, written in almost invisible fine print, of these developments in the industrialised nations.

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