Overview

India’s persistent air and water pollution problems will create a steady demand for environmental technologies and solutions in the coming years. According to ITA reports, the Indian environmental technologies market is valued at approximately $23 billion, including goods and services, and is expected to grow at a CAGR of 7.5 percent from 2023 to 2028. India ranks as the sixth largest world market overall for environmental technologies exports; second globally for the subsectors of air pollution control and solid waste and recycling; and fifth for water/wastewater management.

India’s complex environmental regulations hinge on five major pieces of legislation: the Environment (Protection) Act, 1986, amended 1991; Forest (Conservation) Act, 1980, amended 1988; Wildlife (Protection) Act, 1972; the Water (Prevention and Control of Pollution) Act, 1974, amended 1988; and the Air (Prevention and Control of Pollution) Act, 1981, amended 1987. The E-Waste Management Rules of 2016 and Plastic Waste Management Amendment Rules, 2021, are also playing an impactful role in the environmental technologies space.

The Ministry of Environment, Forest & Climate Change (MoEFCC) is the federal agency responsible for the implementation and oversight of environmental laws in India. The Central Pollution Control Board (CPCB) implements policies framed by the MoEFCC and provides technical services to the Ministry. Enforcement, however, is delegated to the states through State Pollution Control Boards (SPCBs), or to Pollution Control Committees (PCCs) in the eight union territories that answer to state government heads rather than the federal authority.

The CPCB has identified 17 highly polluting industrial categories, including iron and steel plants, non-ferrous metallurgical units, pharmaceutical and petrochemical complexes, fertilizers and pesticide plants, thermal power plants, textile manufacturers, pulp and paper factories, tanneries, and chlor-alkali units. The SPCBs and PCCs manage these industries within their areas of responsibility and administer compliance with the CPCB’s standards for emission or discharge of pollutants. Coal-fired thermal power plants are the single largest contributor to industrial air pollution and are also regulated by the Ministry of Power. For issues relating to municipal wastewater and solid waste management, the Ministry of Housing and Urban Affairs and state-level Urban Local Bodies are important stakeholders.

While there are opportunities for U.S. environmental technologies companies to export to India, challenges remain such as inconsistent application of rules across states, weak regulatory compliance, and occasional issues with corruption.

Growth trends can be estimated by tracking India’s imports of the key categories of equipment used to address environmental challenges. In 2022, India’s total imports of environmental technology equipment was $1.17 billion, with $156 million in imports from the United States.

The Government of India launched the National Action Plan on Climate Change in 2008 to enhance climate change mitigation and adaption efforts. The Climate Change Division of MoEFCC is India’s central agency for climate change cooperation and global negotiations. It is also the central unit for coordinating the National Action Plan on Climate Change. India launched the third edition of the Sustainable Development Goals (SDG) India Index and Dashboard in June 2021. Developed in collaboration with the United Nations in India, and launched in 2018, the Index has been documenting and ranking the progress on 115 indicators by the Indian States and Union Territories towards achieving the SDGs. More details are available in SDG India Index Launch 2021.

At the 2021 United Nations Climate Change Conference (COP26) in Glasgow, Scotland, India’s Prime Minister Narendra Modi announced five ambitious targets to fight climate change. He announced that: India will take its non-fossil energy capacity to 500 GW by 2030; will meet 50 percent of its energy requirements from renewable energy by 2030; will reduce the total projected carbon emissions by one billion tons from 2021 to 2030; will reduce the carbon intensity of its economy by more than 45 percent by 2030; and will achieve the target of Net Zero by 2070. At COP27 a year later, India updated its Intended Nationally Determined Contribution (NDC) to include reducing the emissions intensity of its GDP by 45 percent from 2005 levels by 2030 and supplying 50 percent of its power requirements using non-fossil fuel-based energy sources by 2030.

Indian Imports of Environmental Technology Equipment ($ millions)

Sub-Sector Best Prospects            

Promising sub-sectors in environmental technologies include:

• Water and wastewater management and water quality monitoring                                                      
• Air pollution control and air quality monitoring                                                                     
• Municipal solid waste management
• Climate change mitigation and climate change after-effect containment technology          
• Carbon Capture Utilization and Storage (CCUS)        

Water and Wastewater Management

Water and wastewater management is the most promising sub-sector in India’s environmental technology segment. India has the 5th largest wastewater and water treatment market size, approximately $11 billion and expected growth to over $18 billion by 2026. According to CPCB’s report, India’s water treatment capacity is 27.3 percent and the sewage treatment capacity is 18.6 percent (with another 5.2 percent capacity being added in the near term).

India’s demand for water is projected to be twice as much as available supply by 2030. To overcome these challenges, both public and private sector facilities have ambitious plans to develop comprehensive water and wastewater treatment and distribution infrastructure. Demand for high-end treatment technologies such as desalination is also growing.

The coastal states of Tamil Nadu and Gujarat are front-runners in setting up desalination plants for drinking water supply. Power plants, oil refineries, iron and steel plants, distilleries, cement plants, fertilizer plants and other industries are pursuing the principle of Reuse, Recycle and Zero Liquid Discharge (ZLD). Some of these industries are setting up desalination plants to meet processed water requirements.

Air Pollution Control/Air Quality Monitoring

Air pollution control equipment is also in high demand, as many of the world’s most polluted cities are in India. India is the second largest market for air pollution control in the world, after China. According to GlobeNewswire market report, India’s air pollution control systems market size was valued at $4 billion in 2021 and is expected to reach over $6 billion by 2029, at a CAGR of 5.5% from 2022 to 2029. In 2019, MOEFF launched the National Clean Air Program (NCAP) to reduce air pollution levels by 20 percent within five years in over 100 of the most polluted cities in India.

Procurement of Continuous Ambient Air Quality Monitoring Systems (CAAQMS) under the NCAP project is a good export opportunity for U.S. companies. Over 50 percent of India’s installed power generation capacity is fueled by coal-fired power plants. India has stringent emission standards for power plants, with a target of 60-80 percent reduction in particulate matter (PM), sulfur oxides (SOx), nitrogen oxides (NOx), and mercury emissions. Government-owned NTPC Limited has been the frontrunner in soliciting bids for Flue Gas Desulphurization (FGD) systems. India is the largest emitter of sulfur oxides in the world, accounting for 15 percent of all anthropogenic emissions. Thermal power plants near populous regions and the capital, New Delhi, must install FGD units that reduce emissions of sulfur dioxide. Utilities in less polluting areas have until the end of 2024 to comply or shut down the plants. Plants that have been earmarked for retirement will have until the end of 2025 to adjust to emission norms.

Municipal Solid Waste Management

India is the second-largest market for municipal solid waste (MSW) management in the world, after China. According to Statista, the India Waste Management Market size is estimated at $32 billion in 2023, and is expected to reach almost $36 billion by 2028, growing at a CAGR of 2.25% during the forecast period (2023-2028). Waste management equipment and service companies will also find opportunities in India, as government programs have created demand for waste hauling, compacting, processing and waste-to-energy equipment that meets international standards. In addition to new regulations for landfills and solid waste processing, the government has also been providing funding for waste-to-energy projects and other solutions for upgrading the capacity of cities to manage solid waste.

Climate Change Mitigation and Adaptation

India ranks fourth in the world in terms of climate investment opportunities, with an estimated value of $3 trillion from 2018 to 2030. India’s high “vulnerability score” and high “readiness score” of places it in the upper-right quadrant of the ND-GAIN Matrix. It is responding to climate change, but the adaptation needs and urgency are greater. India is the 48th most vulnerable country and the 104th most ready country. Climate mitigation and adaptation encompass a diverse array of products and services situated at the intersection of energy and technology. These include innovations like renewable energy systems, mitigation solutions such as methane capture from coal mines, and technologies that reduce the impact of climate change on human well-being and property, exemplified by advanced extreme weather forecasting systems.

Carbon Capture Utilization and Storage

India’s carbon capture, utilization, and storage (CCUS) market is still in its early stages of development but is expected to grow rapidly in the coming years. According to a market report by S&P, the India CCUS market size is estimated to be $100-150 billion by 2050. This is based on the government’s target of reaching 750 million mt/year of CCUS capacity by that year. The market is projected to grow at a compound annual growth rate (CAGR) of 15% from 2023 to 2050. In 2021, the government launched the National CCUS Program, which aims to develop and deploy CCUS projects in India. In November 2022, NITI Aayog released a study report on “Carbon Capture, Utilization, and Storage (CCUS) Policy Framework and its Deployment Mechanism in India.” The government’s commitment to reducing greenhouse gas emissions, the increasing availability of CCUS technologies, and the growing demand for clean energy, are all driving the growth of the market.

Opportunities                                                                                             

In 2019, the Jal Shakti Ministry (Water Ministry) launched its Jal Jeevan Mission - a national initiative to provide piped drinking water to 146 million households in 700,000 villages by 2024.

The Mission earmarked a budget of $51 billion to be given to the states to increase household water connection coverage from 18.3 percent in 2019 to 100 percent by 2024. As of January 3, 2023, the number of households with a tapped water connection had increased to 108.7 million or 56.1 per cent, as per the program’s dashboard. The Mission still needs to cover 76.3 million additional rural households (47.3 per cent) in the next two years.

So far, only five states and Union Territories (UTs)—Haryana, Goa, Andaman and Nicobar Islands, Puducherry, and Daman and Diu and Dadra Nagar Haveli—have achieved the Har Ghar Jal status with tap water supply to all rural households. Two more states—Telangana and Gujarat—have reported having achieved Har Ghar Jal status and their claims are being verified under the scheme.

Various other governmental initiatives, such as the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), National Mission for Clean Ganga, Jal Jeevan Mission, and Community Drinking Water Schemes, contribute to the growth of the Indian water and wastewater treatment market. These ambitious projects are creating opportunities for cutting-edge technologies including smart water meters, water quality monitoring systems, water management-related IT systems, tertiary treatment technology, and water-related Engineering, Procurement, and Construction companies.

Major initiatives by the Government of India to mitigate air pollution include the NCAP launched in January 2019, with the objective to reduce pollution levels in 102 of the most polluted cities by 20-30 percent in the next five years. The NCAP calls for the reduction of emissions, the expansion of air monitoring networks, capacity building for pollution management, and the strengthening of public awareness.

The data collected from the continuous ambient air quality monitoring stations will be used as inputs to create Air Quality Index evaluations for the respective cities. In addition to the procurement of equipment, these developments will necessitate consultancy services to analyze the data collected, identify the pollution source apportionment, and recommend appropriate actions for pollution abatement.

We advise U.S. companies to monitor the U.N. Development Business, World Bank, Asian Development Bank, and the Japan Bank for International Cooperation for soft loan and grant-funded project announcements. These projects offer significant front-end consulting opportunities and the possibility to supply equipment during the project implementation phase.

For more information about opportunities in this sector contact United States & Foreign Commercial Service Industry Specialist Ritu Arora.