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					Environmental Goods and Services: Issues for Negotiations for India




                           Vijaya Katti




                         November 2005
Table of Contents

1. Introduction ……………………………………………………………………                                   p.1
2. Environmental Goods and Services (EGS): Status of Negotiations on EGS …   p.3
   2.1 Definitions and Classification of EGS ……………………………………                  p.3
   2.2 General Direction of Negotiations on EGS ……………………………….                p.8
   2.21 Environmental Goods ……………………………………………………                             p.10
   2.22 Environmental Services …………………………………………………                           p.13
3. Overview of India‘s Environmental Goods and Services Industry …………..      p.18
4. Challenges and Opportunities for India ………………………………………                    p.28
   4.1 Multiple Use and Customs Policy ………………………………………..                     p.31
   4.2 Reduction v/s elimination of barriers …………………………………….                 p.32
   4.3 Environmentally Preferable Products (EPPs) …………………………….               p.33
   4.4 India‘s Export Potential for Environmental Services …………………….         p.35
   4.5 Clean Development Mechanism (CDM) ………………………………….                      p.37
5. Conclusions and Recommendations ………………………………………….                         p.41


List of Tables

Table 1 – CPC and GATS Categories of Environmental Services ………………           p.7
Table 2 – Composition of Indian Environmental Industry ………………………             p.19
Table 3 – Foreign Affiliation in the Indian Environmental Industry …………….    p.26
Table 4 – Selected Environmental Joint Ventures ……………………………….                p.27

Annexure

1.     Trade Balance of Indian Environmental Goods as per APEC List
1A.    Share of Export and Import of Indian Environmental Goods as per APEC List
2.     Major Destinations for India‘s Imports and Exports of Environmental Goods as
       per APEC List
3.     India‘s Import of Environmental Products and their Growth Arranged in
       Descending Order
4.     Export of Environmental Goods from India Arranged According to their Growth
       during 1998-2003
5.     Top 20 Exports of Indian Environmental Goods according to Value in 2002 and
       RCA of those Products
6.     20 Environmental Goods of India (experiencing maximum growth rate during
       1998-2003) and their Revealed Comparative Advantage
7.     Items which have more than one use (dual use or multiple use)
8.     Items which can be of interest for India




                                        2
ENVIRONMENTAL GOODS AND SERVICES: ISSUES FOR NEGOTIATIONS FOR

INDIA



Abstract

Liberalisation of trade in environmental goods and services (EGS) has become a key

issue at the complex and rapidly developing trade and environment interface. The World

Trade Organisation (WTO) at its fourth Ministerial meeting in Doha in 2001, decided to

negotiate opening the market for EGS and set out a commitment to the

reduction/elimination of tariff and non-tariff barriers to EGS. This paper aims at

examining select issues for negotiations in the area of EGS against the background of the

Doha Ministerial Declaration. Different concepts of environmental goods and

environmental services, the narrower and the broader definitions, are examined and the

OECD and APEC lists are compared and categories of environmental goods are

highlighted. The paper provides an overview of India‘s EGS industry and market, the

existing tariffs on environmental goods and the importance of these products in India‘s

total exports. It identifies environmental goods in which India has comparative advantage

and discusses the potential for environmental services. It highlights the issues which can

be considered for the negotiating agenda by developing countries in general and India in

particular.



Key words: Sustainable Development, WTO, Doha development agenda, India,

environmental goods and services (EGS), liberalization of trade in EGS, environmental

industry, technology transfer




                                            3
ENVIRONMENTAL GOODS AND SERVICES: ISSUES FOR NEGOTIATIONS FOR

INDIA



1.0 Introduction

Liberalisation of trade in environmental goods and services has become one of the highly

debated set of issues, in the complex and rapidly developing trade and environment

interface. At its fourth Ministerial meeting, held in Doha in 2001, the World Trade

Organisation (WTO) for the first time explicitly made trade and sustainable development

an integral part of its trade negotiation agenda. Paragraph 6 of the Doha Ministerial

Declaration reaffirming the commitment to the objective of sustainable development,

mentions that upholding and safeguarding an open and non-discriminatory multilateral

trading system, and acting for the protection of the environment and the promotion of

sustainable development can and must be mutually supportive. By paragraph 16 trade

ministers have decided to negotiate opening the market for environmental goods and

services and by paragraph 31, there is commitment to the reduction / elimination of tariff

and non-tariff barriers to Environmental Goods and Services (EGS). In particular it has

been agreed to take into consideration developing countries‘ market access concerns and

pay attention to products of export interest to developing countries.



In order to fulfil the Doha Mandate, it is critical for developing countries to understand

the current status of their market for EGS. Since the applied and bound tariffs on

environmental goods are low in developed countries and tariffs in developing countries

for these goods are similar to those for industrial goods, negotiations may lead to




                                             1
substantial reductions in bound tariffs of developing countries. It is against this

background that developing countries need to identify products in which they have a

comparative advantage. This is absolutely necessary because there is no definition of

EGS yet and their perspectives regarding whether to include all environmentally friendly

products in the list of environmental goods differs.



It has been generally agreed that the negotiations for environmental goods will take place

in the Negotiating Group on Market Access (NGMA) while the negotiations for

environmental services will take place in Council for Trade in Services Special Session

(CTSSS). The Committee on Trade and Environment Special Session (CTESS) is to

work towards clarifying the concept of environmental goods and it is presumed that no

sequencing would be involved between that work and the actual market access

negotiations in the NGMA.



This paper aims to examine select issues for negotiations in the area of environmental

goods & services against the background of paragraph 6 and paragraph 16 of Doha

Ministerial Declaration. This paper has the following objectives:



   1. To examine the current status of the environmental goods and services industry

       market in India, the existing tariffs for environmental goods and the importance of

       these products to India‘s total exports

   2. To identify environmental goods in which India has comparative advantage; and




                                              2
   3. To highlight issues which should be addressed on the negotiating agenda by

       developing countries in general and India in particular.



The evidence and lessons that emerge from the investigations of this research paper will

be of interest to all those countries in the South/Southeast Asia region that are trying to

overcome the challenges of effectively integrating sustainable development objectives

into their trade negotiations, and are formulating their negotiating position for the next

round of WTO negotiations. The paper is divided in four sections: environmental goods

and services: state of negotiations in EGS; overview of India‘s environmental goods &

services industry; opportunities for India; and conclusions & policy recommendations.



2.0 Environmental Goods and Services: Status of Negotiations on EGS

2.1 Definitions and Classification of EGS

There is no single universally accepted definition of environmental goods and services

and in the sustainable development debate, different concepts of ―environmental goods‖

and ―environmental services‖ are used. The Doha Declaration does not clearly define

what constitutes ‗environmental goods‘. An environmental good is considered any

equipment, material or technology used to address a particular environmental problem or

as a product that is itself ―environmentally preferable‖ to other similar products because

of its relatively benign impact on the environment (Hamwey et al 2003).



A narrow definition and also a broader definition of environmental goods exist.

According to the narrow definition, environmental goods are those whose use results in a




                                              3
beneficial environmental impact—capital goods or technologies required for ‗end-of-the-

pipe‘ pollution abatement. The broader definition, on the other hand, takes into account

the environmental characteristics of the goods themselves and/or their production

processes. This includes the industrial goods used to provide environmental services to

address pollution and waste affecting water, soil and air. These goods generally have

multiple end-uses, only one of which is to provide environmental services, and usually do

not have inherently environmental characteristics. It is their use to provide environmental

services that qualifies them as environmental goods and they have relatively less negative

impacts on the environment at the production, consumption or disposal stage, or even in

terms of being produced in an environmentally benign manner or with ‗clean

technology‘. Examples of these types of goods include: pumps, valves, compressors,

tanks and containers, chemicals used in water purification, air/water filters, trash

compactors, brooms, plastic lining material for landfill sites, ceramic wares and furnaces

used in incineration, sorting equipment for recycling, measuring equipment to monitor

the environment, noise reducing mufflers, etc.



The Organization for Economic Co-operation and Development (OECD) and the

Statistical Office of the European Communities (Eurostat) have defined the

environmental industry as: ―activities which produce goods and services to measure,

prevent, limit, minimize or correct environmental damage to water, air and soil, as well as

problems related to waste, noise and ecosystems‖(OECD 2003). This definition provides

a basis for an indicative list of EGS that extends across environmental media and




                                              4
classifies them under three broad rubrics: i) pollution management, ii) cleaner

technologies and products, and iii) resource management.



In yet another approach, some experts have interpreted environmental goods as goods

with inherently beneficial environmental aspects such as biodegradability. According to

this view, products like organic fertilizers, natural dyes and jute and bamboo products

could be brought into the ambit of environmental goods.



Two types of definitions and sectoral coverage under the category of Environmental

Goods have been quoted extensively in the literature – OECD and Asia Pacific Economic

Cooperation (APEC). These lists have formulated the basis for the stands taken by

various countries for negotiations. The APEC list largely includes end-of-pipe

environmental equipment; measuring and testing instruments; alternative power

generating equipment; parts and components of both these categories of products. OECD

has developed three categories of Pollution Management Products, Cleaner Technologies

and Products and Resource Management Products. The OECD list includes all the

categories in APEC list and additionally includes chemicals used in pollution control

processes and some other items (Environmental Goods: A comparison of the APEC &

OECD lists, OECD-2003) in addition to equipments, chemicals, as well as cleaner

technologies, which fit into the wide definition of environmental industry. It also

encompasses cleaner processes and resource management. However, there are many

items in the list that cannot be captured by the HS (Harmonized System) code system for

the purpose of international trade.




                                             5
Counting only entries with corresponding Harmonized System (HS) codes, the OECD list

appears to be about 50% longer than the APEC list. However, when one eliminates

multiple listings at the 6-digit level, they are more similar in length: there are 132 unique

HS codes in the OECD list, compared with 104 in the APEC list. The composite list has

233 entries identified with an HS code, covering 198 different goods. These magnitudes

are small compared with the total numbers of lines contained in WTO Members national

tariff schedules, which range from less than 6000 (in the schedules of Australia and

India) to over 11000 (in the schedules of Hungary, Korea, Mexico, and Turkey). In all,

less than 30% of the goods are common to both lists. The greatest areas of overlap are

found in the categories of air-pollution control, recycling, incineration, and measuring

and monitoring equipment (UNCTAD 2003).



An UNCTAD study (July 2005) has set out 2 types of EGS. Type A environmental goods

include industrial goods used to provide environmental services to address pollution and

waste affecting water, soil and air. These goods generally have multiple end-uses, only

one of which is to provide environmental services and usually do not have inherently

environmental services. Usually do not have inherently environmental characteristics; it

is their use to provide environmental services that qualifies them as environmental goods.

Type B category includes Environmentally Preferable Products (EPPs), including both

industrial and consumer goods. These goods have environmentally preferable

characteristics relative to substitute goods, i.e., reduced negative environmental impacts

in production, end-use or disposal and are generally used for purposes other than

environmental ones in commercial and household applications (Kumar 2002).




                                              6
The classification of (trade in) ―environmental‖ services in the context of ongoing WTO

negotiations is based on the concept of human-activities-related services. Two major

subcategories are infrastructure-related services, such as sewage, refuse disposal and

sanitation services, and environment-related commercial services (UNCTAD 2003).



Table 1. CPC and GATS Categories of Environmental Services

CPC Division 94: Sewage and Refuse               GATS Sectoral Classification 6:

Disposal, Sanitation and Other                   Environmental Services

Environmental Protection Services

9401 Refuse Disposal Services                    A. Sewage Services

9402 Refuse Disposal Services                    B. Refuse Disposal Services

9403 Sanitation and Similar Services             C. Sanitation and Similar Services

9404 Cleaning Services of Exhaust Gases.         D. Other

9405 Noise Abatement Services.

9406 Nature and Landscape Protection

Services.

9409 Other Environmental Protection

Services n.e.c.



Source: (UNCTAD 2003, Environmental Goods and Services: Challenges and

Opportunities for Central American and Caribbean Countries. Geneva : UNCTAD)




                                             7
Environmental services have been defined as: (a) services provided by ecosystems (e.g

carbon sequestration); or (b) human activities to address particular environmental

problems (e.g. wastewater management) (Cattafesta 2003).



2.2 General Direction of Negotiations on EGS

Negotiations in this field are being carried out with the following objectives:

   Support member countries in taking measures to improve their environment.

   Promotion of production and trade in environment friendly products.

   Development of environmental goods and services industry.

   Adoption of environment friendly technologies (Joshi 2003).



On the basis of submission to the WTO, proposals put forward by various countries can

be put in the following categories:

(i) APEC list

(ii) Items in OECD list which are not included in the APEC list

(iii) Inherently environment friendly products

(iv) Products made using environment friendly processes (npr-PPM)

(v) Japanese proposal including energy efficient consumer products and CFC free

products

(vi) Qatar‘s proposal of products using low carbon, energy efficient technologies

(vii) Proposal by Taiwan to identify 30 unique tariff lines from APEC list

(viii) A common list and a development list approach given by China




                                             8
The focus of deliberation is on the following points:

   Should there be a relationship between a country‘s requirements in the environmental

    sector and the market access commitments?

   Does the WTO have any role to play other than in trade liberalization?

   Is greater coherence between different international organizations required?

   Does trade liberalization in EGS enhance welfare in developing countries? (Joshi

    2003)



Many members propose ‗list-based‘ approaches instead of seeking prior definitional

clarity on environmental goods. For example the US proposed a ‗core-list‘ (on which

consensus exists) and ‗complementary list‘ for which individual countries could nominate

products. Faster liberalisation is ‗envisaged‘ for core-list products (zero tariffs by 2010)

and liberalisation of a minimum of x% on goods in complementary list (which Members

could choose) (Suathan 2004).



China (TN/TE/W/42) has called for a ‗common-list‘ including goods of export interest to

both developed and developing countries and a ‗development list‘ (for Special &

Differential (S&D) treatment born from the common list) list which would include those

goods from the common list eligible for exemption or a lower level of reduction

commitments (Ibid.).



On specific products only Japan (TN/MA/W/15) and Qatar (TN/TE/W/19) and Taiwan

have submitted proposals. Japan‘s list includes products from both APEC and OECD lists



                                              9
plus some additional products. Energy efficient consumer equipment is notable. Qatar has

proposed efficient, lower carbon pollution emitting fuels and technologies. Taiwan‘s

submission focuses on pollution control equipment (Ibid.).



2.21 Environmental Goods

There are broader categories of environmental goods suggested by various

groups/members so far during the negotiations. Interestingly, none of the countries agree

on a definition of EGS. Canada, Japan and the United States have adopted broad

definitions of the environment industry. Italy, Germany and Norway, on the other hand,

have chosen narrow ones. The European Commission‘s (EC) definition (1994), includes

clean technologies whereas other definitions, including that used in the Organisation for

Economic Co-operation and Development (OECD) study (1992), tend to exclude clean

technologies (CUTS 2004a).



Earlier discussions focused on the definitional aspects and now in the Negotiating Group

on Market Access (NGMA) some of the Members have expressed views that the

negotiations should take place on a ‗list approach‘ rather than follow the definitional

route. Some definitions have been given, but agreement on a common definition has

never been reached. Efforts are ongoing to carve out a WTO list from the OECD and

APEC lists; some countries have given a list but work is still going on. There have been 9

submissions so far – all from developed countries (Kumar 2002).




                                             10
   OECD/APEC lists mostly contain products of which developing countries are net

    importers.

   There are a few products in the OECD/APEC lists for which developing countries (as

    a group) are net exporters such as methanol, ethanol, mats and screens, fluorescent

    lamps and plastics. Most top exporters are middle income or emerging economies

    such as Mexico, Singapore, Korea, Malaysia and Brazil (UNCTAD-

    TD/B/COM.1/EM.21/CRP.1).



Several developing countries argue that the product coverage of environmental goods

would need to include more products of export interest to them. Some WTO members

have also argued that environmental goods should include goods produced in an

environmentally friendly manner (e.g. goods identified on the basis of Process and

Production Methods (PPMs)). Examples include renewable-energy products,

biodegradable products from natural fibers such as jute and coir, recyclable products,

non-timber forest products, etc. India (TN/MA/W/10) for example has supported

inclusion of environmental friendly products such as jute products or those based on

biodiversity (Singh 2004b).



Environmentally Preferable Products (EPPs) are distinct from pollution-control goods

and technologies as environmentally beneficial effects arising during course of

production, use or disposal in terms of less pollution or greater resource-efficiency. They

are not used to treat or deal with environmental problems as such. For most developing

countries, products of export interest lie in EPPs rather than environmental equipment,




                                            11
per se. However a number of EPPs such as those based on energy-efficiency (for example

refrigerators) raise issues of appropriate classification and evolving technologies

(Suathan 2004).



Organic products are different from other goods because they are inherently

environmentally friendly (through their impact on human health, etc.). It is felt that such

goods must have different customs codes assigned under the international customs

system known as the Harmonised System (HS), which is maintained by the World

Customs Organisation (WCO). The six digit codes, which are regularly updated by the

WCO to take account of changes in technology or patterns of international trade, are

based on national customs codes.



In the latest amendments to the HS codes in January 2002, the WCO, for the first time,

included social and environmental fields, particularly relating to products under certain

MEAs (Multilateral Environmental Agreements), including CITES, the International

Convention on the Conservation of Atlantic Tunas (ICCAT) and the Basel Convention.

Amendments to the HS codes, in order to differentiate between products based on their

environmental characteristics, are arrived at through fairly protracted deliberations in the

WCO. As a start, such customs codes may need to be developed at the national level and

then gradually be harmonized. This issue may also provide an opportunity for developing

countries to play a more proactive role in the WCO to ensure that their trade interests are

taken into account in the development of customs codes (Chaytor 2003).




                                             12
The EC is a major proponent of using process-based criteria (PPMs) to include goods

produced in an environmentally friendly manner. India has made it clear that it is against

the inclusion of goods that are produced in a manner that is ‗environmentally friendly‘

(i.e. differentiated on the basis of PPMs). Chile in its submission to the WTO strongly

opposed the definition of environmental goods on the basis of PPMs stating: ‗there is no

place in the GATT framework – nor is it acceptable – for any possible definition of

environmental goods to include the concept of production processes and methods.‘

Similarly, the Republic of Korea has argued that the environmental goods ‗should be

determined in terms of their end-use, but not in terms of their production and process

methods.‘ Under the WTO rules, it is not permitted to discriminate against products

based on PPMs. Therefore products like organic foods and certified timber products are

ruled out of this category (CUTS 2004b).



2.22 Environmental Services

Services are currently being negotiated in the Committee on Specific Commitments on a

bilateral basis, as WTO members respond to each other‘s requests, and thus, it is likely

that in the short term members will use a variety of different classifications for

environmental services. Meanwhile, the Committee on Trade & Environment Special

Session (CTESS) has not yet played the guiding role it has been given on the definitional

issues. The Quad countries (EC, US, Canada, and Japan) are likely to push strongly for a

broadening of the W/120 classification (CUTS 2004b). Since the WTO already had a

basis for the classification of environmental services (i.e., W/120), the negotiations on




                                             13
environmental services are considerably more advanced than those on environmental

goods (CUTS 2004b).



The broader OECD definition/classification has found favour with some developed

countries, such as the EC, US, Canada, Japan, Switzerland and Australia. Adopting a core

listing approach, the US is in favour of a new classification that incorporates a list of

environmental sectors that are significant to the provision of environmental services, e.g.,

construction, engineering and consulting. The US also mentions the need to focus the

classification on pollution prevention, rather than ‗end-of-pipe‘ clean up services, i.e.,

goods that are used to clean the environment or prevent pollution. Canada also proposes

the use of clusters in the negotiations, as a check-list. The EC has suggested an advanced

definition that offers more categories than the W/120 classification, based on what it

considers ‗pure‘ environmental services. Such services would be the subject of a cluster

negotiation, so that they would fall within other sections of the GATS (avoiding the

mutual exclusivity pitfall). Australia and Switzerland are broadly in favour of the EC‘s

approach. Switzerland is of the view that there are several fields of activities that would

accommodate the gradual integration of environmental services, which include:

professional services relating to the environment, consultancy, sub-contracting and

engineering relating to the environment, and construction relating to the environment.



Developing countries have not made express proposals on environmental services, apart

from Colombia, which emphasized pollution control and waste management. It accepts

the EC classification as a working basis, but would add three further services: (i) the




                                             14
implementation and auditing of environmental management systems; (ii) the evaluation

and mitigation of environmental impact; and (iii) advice in the design and

implementation of clean technologies. Cuba calls for differential treatment in order to

enhance the competitiveness of developing countries (Ibid.).



Various points are being raised over different proposals on EGS submitted by various

countries. Qatar‘s proposal on natural gas raises the question as to whether natural

resources can also be considered as environmental goods and benefit from lower tariff

and non tariff barriers (NTBs) (including subsidies to alternative fuels to coal). If the

intention is to promote environmentally friendly fuels, ‗relativity‘ considerations must be

kept in mind. E.g.: Hydrogen>Ethanol>natural gas>petroleum>coal. What would happen

to trade-preferences to natural gas once use of ethanol or hydrogen becomes common?

Again lowering barriers should also look not only at tariffs but also internal taxes,

subsidies that may provide strong incentives or disincentives to use a particular fuel.

Japan‘s proposal on energy-efficient products raises issues of how appropriate tariff

classification distinctions and trade preferences will be created, say for example, between

a normal and energy-efficient washing machine, the latter which may become obsolete

the following year as technology improves (Suathan 2004). Brazil, Cuba and India

highlighted the problems through submissions; in the discussions in CTESS.



Several problems with the ―list approach‖ have been identified. The list approach is too

diffused to meet environmental objectives. It appears basically to address only market

access objectives. Most of the developing countries are net importers. Export from the




                                             15
South is basically to the South; imports are from the North. This will affect small and

medium enterprises, which comprise 60% of the industrial base. It is further indicated

that there is always a need to negotiate as reflected in the ‗living list‘ concept (New

Zealand proposal) which changes the balance of rights and obligations arrived at the

negotiations (Kumar 2002).



Dual and multiple uses of EGS, e.g. electricity meters, heat exchangers, microwave

ovens, etc. also make it difficult to earmark them separately. There is no synergy between

goods and services. Many environmental activities entail delivery of services. There is a

lack of technology transfer mechanism; most of the environmentally sound technologies

are protected by Intellectual Property Rights and many instances of unsuitable

equipments being transferred to developing countries have been noted (Ibid.).



India has proposed the Environmental Project Approach. The objectives of the approach

are as follows:

      To bring trade liberalization to meet environmental and developmental goals.

      To bring synergy between environmental goods and services.

      To address diversity in environmental standards.

      To bring common but differentiated responsibilities.

      To give policy space to national governments.

      To bring market-based initiatives for environmentally friendly goods and services

       through capacity building – the World Summit on Sustainable Development also

       supports this (Ibid.).



                                             16
According to India an Environmental Project includes any activity with a view to

achieving environmental objectives. Goods and services used in the project are to be

decided by a National Designated Authority (DNA) on the basis of techno-economic

valuation in a specified period of time for specified national environmental objectives.

Tariff concessions for the project period need to be considered. Both public and private

projects can be included – some threshold can be put. Many countries already have

something like this – e.g. India and Thailand. This is compatible with the Harmonized

System of classification – Chapter 98 of the WCO Book (Ibid.).



India has given the following advantages of the ‗Project Approach‘ in support of its

argument:

   This approach is cohesive and integrated – goods and services – OECD study (1st

    July 2005) – potential benefit more for Developing Countries (DCs) if simultaneous

    liberalization in goods and services.

   It is focused and direct – to the goals of environmental objectives.

   It can accommodate changing needs of global environmental requirements.

   Some of the positive measures include:

     Technology transfer – with the services, leading to capacity building.

     Does not affect market access schedules of the goods – does not lead to ―zero-for-

       zero‖ Sectoral non-agricultural market access (NAMA) negotiations.

     It also enhances mutual supportiveness of trade and environment – Para 31(iii)

       objective (Ibid.).




                                             17
India claims that the Project Approach also achieves Transfer of Technology (ToT)

objectives. Transfer of Environmentally Sound Technologies (ESTs) is expected to

increase compliance with the Technical Barriers to Trade Agreement (TBT) and the

Agreement on Sanitary and Phytosanitary Measures (SPS), to give more market access in

developed countries, enhance indigenous capacity building in EGS, and increase

compliance with MEAs. Imports of ESTs are expected to increase the exports leading to

net trade gain – (+) and reduction in overall cost of the global economy. More availability

of EGS reduces the cost to the environment and improves environmental benefits (Ibid.).



3.0 Overview of India’s Environmental Goods and Services Industry

In India, the environment has emerged as a distinct industry in recent years. Today, there

is a wide range of EGS. These include products that minimize material and energy use,

reduce environmental risk, and prevent pollution right at the source. This sector was

virtually non-existent in India until two decades ago. Nonetheless in the past decade, with

increasing environmental awareness in all sections of society and positive response by the

industry and government, India has been turning into a promising market for EGS.

India‘s current spending on environmental protection is approximately to the order of

0.5% of its GNP compared to 1-3% in developed nations. The environmental

infrastructure services segment is in the realm of Urban Local Bodies while

environmental support services have traditionally been part of integrated engineering

consulting services. The first comprehensive estimate of the Indian environment market

including equipment and services was made for the year 1994 and valued at US$1.9

billion by Confederation of Indian Industry (CII) – 1996. However, the estimate was




                                            18
conservative since it did not cover segments like industrial non-hazardous solid waste

treatment or sanitation. The estimates were based on secondary data collected from

government agencies, industry suppliers and multilateral and bilateral assistance

agencies. A more recent estimate, in 2002, valued the Indian environment market at US$

4.36 billion, with an annual growth rate of 15 per cent. In 2000, the market was estimated

at US$ 3.29 billion, and in 2001 at US$ 3.79 billion. The market estimate included

environmental management technology, equipment and services, including clean and

renewable energy (Sawhney & Chanda 2003).




The domestic environmental industry in India is still highly disorganized and is

dominated by the Small Scale Industry units that lack the resources to invest in Research

and Development as well as in marketing and servicing infrastructure. The environmental

business is shared by a number of entities including equipment suppliers, system

suppliers, engineering procurement and construction contractors, consultants and service

providers. Table 2 summarizes the role of different entities and overall composition of the

industry.




Table 2. Composition of Indian Environmental Industry

Business entities                    Details of products and services



Equipment suppliers (specialized)    Manufacturers of filter presses, oil separators, dust

                                     collectors, bag filters, electrostatic precipitators, etc.




                                            19
                                 Essentially contractors who put together various

System supplies                  equipments and who guarantee performance of the

                                 system (water treatment or dust emission control,

                                 etc.)



                                 Used in the conditioning of water or wastewater as

Chemical suppliers               part of the treatment process.




Engineering procurement and      The environment projects are part of larger

construction (EPC)               packages done by entities who may not have the

contractors/lump sum turnkey     process know how, but are able to put together

contractors                      several packages and implement the whole project

                                 with their project management and construction

                                 capabilities



Consultants                      They     provide   concept       development,   project

                                 budgeting, detailed engineering, environmental

                                 impact assessment, troubleshooting, environmental

                                 audit, and a variety of such services.



Build Own Operate and Transfer   Not very common now, but the future holds




                                         20
(BOOT) and Build Own Operate          enormous scope for outsourcing the water/waste

(BOO) Operators                       water treatment and facilities management to third

                                      parties, allowing companies to focus on the core

                                      area of their business.



Analytical services like              Suppliers of monitoring and analytical equipment

laboratories, etc.                    and laboratory services providers.




Source: Singh, Sandeep, ―Trade Preferences and Growth of Environmental Industry:

Issues and Implications for India‖, Indian Journal of Economics & Business, Vol. 3,

No.2, 2004, p. 293.



The total environmental market in India was estimated to be around US$8 billion in 2000

and is expected to grow to approximately US$ 13 – 14 billion by year 2005. Active

financial participation of multilateral and bilateral agencies in large urban environmental

infrastructure projects has also helped to a large extent in this regard. There are many

successful joint venture partnerships with countries like USA, UK, Germany,

Netherlands, Canada, and Sweden, etc. The market in India for environmental business

in pollution control equipment is estimated to be growing around 10 – 12 % per annum.



The development of the Indian environmental industry in the past two decades reveals

that the growth has been essentially demand driven. The Central Pollution Control Board




                                            21
was constituted in 1974, essentially to implement provisions of the Water (Prevention

and Control of Pollution) Act. Subsequently a full-fledged Ministry of Environment and

Forests was established in 1985, and a comprehensive Environment Protection Act came

into being only in 1986. Thus the environmental industry took off only after 1986

(Mattoo & Stern 2003).



In response to increased demand for pollution control equipment as a result of stricter

regulations and laws, some Indian companies started manufacturing some of these

products while many other such equipment, where demand did not justify domestic

production or where the technology was not available, continued to be imported from

companies outside India.



Hazardous waste treatment is another area where the demand for EGS is increasing

rapidly. It has been estimated that approximately 5 million tonnes of hazardous waste is

generated annually in India, most of which is in the four highly industrialized states of

Maharashtra, Tamil Nadu, Gujarat, and Andhra Pradesh. As the market is in the early

stages of development, there are several technological gaps that produce opportunities for

imported technologies and goods. Indian companies do not have advanced technologies

in the areas of cyanide and phenolic waste treatment, solidification and stabilization of

solid waste, and plasma and hydrogenation technologies.



The air pollution control segment also represents a big slice of the overall market. As per

estimates, the Indian market in air pollution control and management is estimated at US$




                                             22
408 million. India‘s air pollution control industry has developed capabilities for

manufacturing a diverse range of equipment for dust collection in the stationary air

pollution control subsection. India‘s expertise is, however, limited in the case of special

gaseous pollutants.



Since certification and labeling are essential to endorse the eco-sensitivity of

commodities and compete in the global market, firms in developing countries are

increasingly moving towards the introduction of environmental management systems. On

the industrial front, the ISO 14001 certification is the most popular tool to indicate

environmentally friendly management systems worldwide. Indian industry also has

responded positively to this challenge, as can be seen very clearly. The ISO survey 2003

reveals that ISO 14000 certificates have increased from 1 to 879 between 1995 and 2003

and ISO 9000 certificates have increased from 1023 to 10,198 in the same period.



As per estimates by the Confederation of Indian Industry (CII), India has approximately

350–400 pollution control equipment manufacturing and environmental consulting

companies. Over 100 companies in India are associated with international companies in

the form of joint ventures and technology transfer agreements for various types of

pollution control equipments (Singh 2004a).



Trade liberalization in India systematically removed trade barriers and restrictions on

FDI, post-1991. Investment in the environmental services sector has been autonomously

open with 100% FDI in India; domestic firms are engaged in both joint venture and long-




                                             23
term strategic partnerships. Joint ventures have been prominent in the Indian environment

industry, and over 100 companies have associations with international companies in the

form of joint venture and technology transfer agreements for various types of pollution

control equipments. While there are various joint ventures and collaborative

arrangements in the environmental goods sector (between 100 to 150) there are fewer

arrangements in environmental consultancy services sector.



Foreign direct investment (FDI) in environment equipment and services (i.e. manufacture

of pollution control equipment, sewage, refuse, and consultancy services) are allowed

under the automatic route with up to 100 percent foreign equity holding.

However, foreign investment has been largely routed through the Foreign Investment

Promotion Bureau (FIPB) in India, since it comes with a written approval of the

Government of India. Thus while the automatic route is open for foreign investment in

environmental services, the FIPB has been approving several of these projects. During

1993 through 2002 the total FDI in the environment sector approved by the FIPB

amounted to US$ 32.7 million. The largest share of this foreign investment came from

the US (US$ 10.42 million $, 31.86% of all countries), followed by the Netherlands (US$

7.63 million or 23.33% of all), Singapore (US$ 5.93 million, 18.65% of all), UK (US$

2.83 million, 8.65% of all) and Germany (US$ 2.11 million, 6.45% of all) (Sawhney &

Chanda 2004). In 1991–2 there was no FDI or foreign technology cases (FTCs) in the

environment sector approved by the FIPB in India. Countries like Canada consider the

prospects for investment. Countries like Mauritius, Italy, Denmark, France and Japan also

invested in Indian environmental industry in terms of capital or technology.




                                            24
Some of the Indian environmental services firms have established long term strategic

partnerships with foreign firms to enhance their skills in selected niche areas: for

example, in 1997, Technofab Engg (India) formed Tetra Tech India Ltd under a joint

venture with Tetra Tech EMI (US) to offer consultancy and engineering services in

environment, energy, and infrastructure. Engelhard Environmental Systems (India) Ltd.,

a joint venture of U.S.-based Engelhard Corporation and India-based UCAL Fuel

Systems Ltd., has started production at India's first auto-emission catalyst plant. Foreign

companies have also opened subsidiaries in India to take advantage of lower cost of

manufacturing there. Companies like Pentair Water India Ltd., Hindustan Dorr-Oliver

Ltd., IRG Systems South Asia Ltd., Acres International and Montgometry Watson

Consultants India Private Ltd. have opened subsidiaries in India in producing

environmental products (Singh 2004a).



An increasing number of Indian companies are seeking expertise in the EGS sector from

other OECD countries. They have been receiving good responses from companies in the

US, Germany, Netherlands, Japan, Italy, and Canada. Several European and US players

have already established their presence and market share through partnerships with

Indian firms. These companies are setting up shops considering not only the domestic

market but also the cheap and trained manpower.



A few big Indian engineering companies like Thermax Ltd, Engineers India Ltd, and

BHEL (Bharat Heavy Electrical Ltd) offer services and equipment as part of turnkey

consulting services. Of late many Indian companies have entered into joint ventures with




                                             25
companies and some US companies have also started setting up wholly owned

subsidiaries after the government permitted 100% FDI for equipment manufacturing and

for consulting/management services in the sector.

U.S. suppliers of environmental products and services have found India to be a receptive

and profitable market in recent years. As India globalizes its economy and struggles to

cope with environmental concerns exacerbated by its high population growth and

urbanization, U.S. solution providers are discovering increasing opportunities.



Foreign Affiliation in the Indian Environment Industry and Selected Environmental Joint

Ventures are furnished in Table 3 & 4.



Table 3. Foreign Affiliation in the Indian Environment Industry

Indian Company                              Foreign Partner

General Electric Company of India, Ltd      American Air Filter International SA

Paramount Pollution Control Pvt. Ltd.       Anderson

Flakt India                                 ABB Environmental Services

Hindustan Development Corporation Ltd.      C-E Air Preheater Combustion Eng.

Thermax Limited                             Babcock & Wilcox, USA,

                                            General Electric Environmental Services, Inc.

Saraswato Omdistroa; Sumdocate              Smith & Loveless

Humphreys & Glasgow Ltd.                    Jacobs Engineering Ltd.




                                            26
Source: Sawhney, Aparna and Chanda, Rupa (May 2003) ―Trade in Environmental

Services: Opportunities and Constraints‖ Working Paper No. 102, Indian Council for

Research on International Economic Relations (ICRIER), New Delhi, p. 58.



Table 4. Selected Environmental Joint Ventures

Company                                Foreign partner



Vestas RRB India Limited               Vestas Wind System A/S, Denmark



Tata BP Solar India Ltd.               BP SOLAR (a wholly owned subsidiary of the

                                       erstwhile British Petroleum), the UK



Suzlon Energy Ltd.                     Sudwind Energie, Germany



BHEL-GE Gas Turbine Services           General Electric, the US



Flakt India Ltd.                       ABB Environmental Services



Kirloskar Electric Ltd.                Wind Energy Group, UK; NEPC, India



Hindustan Development Corporation      C-E Air Preheter Combustion Engineering

Ltd.




                                          27
Paramount Pollution Control Ltd.           Anderson, the UK



Thermax Ltd.                               Babcock & Wilcoz, US, General Electric

                                           Environmental Services, Inc.



Humpherys & Glasgow Ltd.                   Jacobs Engineering Ltd.



Source: Singh, Sandeep, ―Trade Preferences and Growth of Environmental Industry:

Issues and Implications for India‖, Indian Journal of Economics & Business, Vol. 3,

No.2, 2004, p. 297.



4.0 Challenges and Opportunities for India

The market for environmental services in developing countries such as India has been

growing due to increased environmental regulations, urbanization, and industrialization.

In 2001, about 28% of the billion plus Indian population (about 285 million) were living

in cities and the proportion of urban population is expected to further increase to 40% by

2021. Moreover, enhancement in the set of domestic environmental regulations,

liberalization and increased private participation in municipal activities during the last

decade has increased opportunities for trade in environmental services.




An attempt has been made in this section to examine the import export structure of

environmental goods of India as per APEC List for five years i.e. from 1998-99. Despite

the presence of a large number of domestic players and setting up of many joint ventures



                                             28
with foreign companies to cater to the demand, a large number of environmental goods

are required to be imported into the country. Indian imports in this category are quite

significant as compared to exports. Moreover, imports exceed exports in almost all the

items for all the five years i.e. on continuous basis except a few items. As can be seen

from Annexure 1, India faces deficit in the balance of trade in 84 items out of 100

environmental products traded by India. (Based on author‘s own analysis of data

downloaded).



Major export and import destinations of Indian environmental goods have also been

identified in Annexure 2. US, EU, UK, Germany and in some cases Japan are the major

developed countries where environmental goods are exported. For most of the items

major export destinations include countries like Sri Lanka, Puerto Rico, Greece, Algeria,

Iraq, Iran, Nigeria, Nepal, Laos, Trinidad and Tobago, Qatar, Malawi, Zimbabwe,

Malaysia, Yemen, Myanmar, Niger etc. A great fluctuation of major export destination

from year to year has been noticed. For example in 2002 the export of 902810 (Gas

Meters) to Egypt was very small while in 2003 Egypt became the major destination for

Indian export for the same product. India imports from many destinations, but Germany

and USA are the major countries from where most of the commodities are being

imported.



The sub-total of the last five years imports and exports of environmental goods on the

basis of the APEC list made in Annexure 1A reveals that percentage of these goods in

total exports and in total imports is 0.01 % and 0.02 % for the last few years, which is




                                            29
very insignificant. The growth rate (compound annual growth rate (CAGR) from 1998 to

2003) of Indian exports and imports of environmental goods has been calculated & items

have been ranked accordingly in Annexure 4. Analysis of 100 environmental goods

considered here reveals that although the rate of growth is positive for 83 export items,

the rate of growth is not very significant and less than 1 in 82 products. The number of

items in which the rate of growth is positive is much more for imports as compared to

exports. The same way that the rate of growth of imports is positive for more than 60

items as can be seen from Annexure 3.



Revealed Comparative Advantage Index has been calculated (formula given after the

endnotes) for identifying high export potential environmental products. This has been

done in two ways. First, these export products have been ranked in terms of growth and

the Revealed Comparative Advantage (RCA) of the top 20 products has been calculated

(Annexure 6). It is found that for those products India does not have comparative

advantage. But, then export items have been ranked according to value in 2002 and RCA

has also been calculated for those top 20 export products (Annexure 5). The analysis

reveals that India has comparative advantage in 4 products only viz other centrifugal

pumps, other instruments for measuring and checking electrical quantities excluding

electricity meters and other refractory ceramic goods.



As has been already mentioned, trade balance of India is negative for 84 environmental

products. India has comparative advantage in only 4 products among our top 20 exported

products in terms of value. Again the tariff data shows that our tariff rate is much higher




                                             30
than the corresponding tariff rate of developed countries. That means if India reduces

tariffs of the environmental products as demanded by the developed countries, it will go

against India‘s terms of trade.



4.1 Multiple use and customs policy

For customs policy purposes and trade nomenclatures, a good is defined and assigned to a

product code according to its physical characteristics: e.g. size, material, principal inputs.

However, in investigating environmental goods interest revolves around how the product

is to be used, which is quite difficult given the possible multiple uses. In narrower

definitions there are also problems in determining the contents of a list of ‗environmental

goods‘. The most serious concern is the multiple uses of environmental products. For

example, separating harmful waste products from the output stream calls for a centrifuge.

Yet centrifuges have a host of industrial uses, which are not necessarily environmental.



An attempt is made to examine these goods on the basis of their use. The list of goods

which have more than one use is given in Annexure 7. There are many items in the list

that are not predominantly used for environmental purposes. In fact, there are many

general industrial types of equipment, which may or may not have any use at all for

environmental purposes. The list includes equipment with multiples uses such as pumps,

condensers, millimeters and refractory bricks. Therefore, duty reduction on such general

industrial items will also have significant ramifications for other sectors of industries like

manufacturers of fans, pumps, and scientific laboratory equipment (Singh 2004a).




                                              31
4.2 Reduction v/s elimination of barriers

Developing countries are apprehensive that any indiscriminate tariff reduction would

increase their deficit. In the identified goods and services what level of elimination or

reduction should be appropriate given India‘s trade interests as well possible

environmental benefits needs to be analysed carefully.



Data on customs tariffs for environmental goods as per the APEC List has been compiled

for the years 2003-04 and 2004-05. It further reveals that customs tariffs on

environmental goods in India have been revised in a downward direction. It reveals that

only in the case of commodity no. 230210 (of maize (corn)) the rate of duty remained

unchanged at 30% in 2004-05. For the majority of environmental goods tariffs in the

previous year were 25%. While in 73 items the tariff has been reduced from 25% to 15%,

for 6 products this has been reduced to 10% from the earlier level of 25%. For 19

products the tariff has been pegged at 10% in 2004-05 from 30% in 2003-04. For product

No. 854140 (photosensitive semi-conductor devices, including photovoltaic cells whether

or not assembled in modules or made up into panels; light emitting diodes) and 902610

(for measuring or checking the flow or level of liquids), 902620 (for measuring or

checking pressure) the tariff was 15% in the previous year while these have become free

in this year. Some products viz 902680 (other instruments or apparatus), 902720

(Chromatographs & Electrophoresis Instrument), 902750 (other instruments and

apparatus using optical radiations (UV, visible, IR)) and 902780 (other instruments and

apparatus) the duty has been reduced to zero from the 10% tariff obligation of previous

year. For the product 902690 (Parts & Accessories of Instruments/Apparatus of Heading




                                             32
9026) the tariff was merely 5% in 03-04 and now it has become duty free. So, currently

for 92 items India has tariff of 15%, for only 6 items it has 10% duty and for 9 items now

India has removed the tariff barrier.

Indian industry‘s feedback on tariff reduction is as follows:

1.     Tariff reduction would provide more choice to the users of these types of

       equipment. In many cases, these equipments are used as inputs for pollution

       control systems and projects carried out by the environmental industry.



2.     Tariff reduction in the case of stand alone equipments wherein several

       components are imported from other countries may lead to a tariff structure with

       high tariff anomalies where duty on components would be higher than on finished

       goods.



3.     Reasonable import tariffs are often incentives for foreign investors to set up their

       production base in India, especially in a fast growing area like environmental

       management equipments. Extremely low or zero tariffs might discourage

       companies to make such investment decisions and adversely affect procurement

       of more local components. With a drastic reduction in tariffs, foreign companies

       will prefer to export goods from their own countries rather than investing in India.



4.3 Environmentally Preferable Products (EPPs)

Environment and ecology occupy a prominent place among the key focal issues faced by

the world today. EPPs are generally described as products that, from a life-cycle



                                             33
perspective, cause significantly less ‗environmental harm‘ than alternative products that

serve the same purpose (UNCTAD, 1995). In an era of degenerating environment, efforts

are on to produce 100% Eco-friendly textiles where even the cotton will be grown

without chemical fertilizers. This is already being done in India in the form of Ponduru

Khadi which is produced from wild varieties of cotton found in the mountain terrain of

the Eastern part of Andhra Pradesh, in the South of India. India, like other developing

countries, might have an advantage through the inclusion of such products from the list of

environmental goods, provided such classification is not based on non-product related

process and production methods (npr-PPM).



India has indicated its support for the inclusion of environmentally friendly natural

products of export interest such as jute, coir, rattan, handloom products, handloom

furnishing materials, textiles & clothing made using natural dyes, non timber forest

products and bamboo in the list of environmental goods. These products are natural,

biodegradable, and substitutes for other goods that adversely affect the environment, for

example, jute as a substitute of plastic.



Khadi products can also be included in this category. Khadi is defined as a coarse

homespun cotton cloth made in India. Khadi is acknowledged as one of the coolest and

most comfortable fabrics ever known. Since Khadi deals in natural fibers viz. cotton, silk

and wool only, spun and woven in natural environment, it can boast of being 100%

natural, unlike handloom and mills which receive cotton yarn, blended with some

regenerated cellulose fibres. Khadi dyed in Natural dyes also makes a perfect




                                            34
combination for a green fabric. Some more items which can be of interest for India are

furnished in Annexure 8.



4.4 India’s Export Potential for Environmental Services

The privatization and liberalization of environmental markets promises the standard free

trade benefits to countries based on individual comparative and competitive advantage of

providing environmental services. To quote Indian Council for Research on International

Economic Relations (ICRIER) Research Paper by Aparna Sawhney and Rupa Chanda,

―developing countries like India have the scope of specializing in labour-intensive

environmental services, including skilled segments like environmental consulting,

auditing, analysis, and training.‖



Indian environmental service providers have emerged most significantly in two areas:

first, environmental services in turnkey projects (e.g. integrated engineering services in

energy equipment); and second, environmental support services such as consulting,

environmental impact assessment, auditing, and training (including ISO 14001). There

are also a few companies, which have been specializing in composting of solid waste and

waste to energy services.



Large Indian environmental equipment firms offering accompanying environmental

services have been exporting equipment to Asian, Middle Eastern, and African markets.

They have also begun to explore niche markets in the environment sector within




                                             35
industrialized countries, to boost exports and also to nurture future partnerships and

alliances for technology solutions.



New investment and expansion in the environmental services sector in developing

countries can provide employment opportunities for unskilled as well as skilled labour, as

some of the environmental segments are labour intensive (e.g. waste management,

sanitation, consulting, training, etc). Moreover, since environmental services are typically

provided in conjunction with other products or services, as the environmental services

sector expands so would new demand be generated in other sectors including,

engineering and design, construction, research and development, training, consulting

(Sawhney 2003).



The environmental support services segment constitutes a relatively small share in the

global environmental services industry, and is declining in developed countries. In

developing countries, however, the demand for these services is on the rise as witnessed

within India. Since the environment markets in the OECD countries are quite mature and

saturated, India‘s export potential in this sector is primarily to developing countries,

where the demand for environmental services is growing. Indian environmental service

providers could specialize in services in regions where there are similarities in ecological

and economic conditions. Thus India has opportunities in this segment in some

developing countries in South Asia, Africa, and the Middle East, where environmental

support services are increasingly in demand (Sawhney & Chanda 2004). Indeed, India

has exported environmental consulting services, including training in ISO 14000 and




                                             36
auditing, to countries including Nepal, Sri Lanka, Nigeria, Egypt and Qatar (Sawhney

2003). Several Asian countries, including India, have been the focus of the US

environment industry, given the growth prospects of their domestic environment sector,

under the United States-Asia Environmental Partnership (US-AEP). In the environmental

exports to Asian countries Japan is the leader (Ibid.).



The important service sectors for India are water and wastewater management, solid

waste services, protection of ambient air, remediation and ancillary services. The

privatization and liberalization process in this sector must ensure a healthy balance

between economic efficiency, social equity, and environmental sustainability.



4.5 Clean Development Mechanism (CDM)

The Clean Development Mechanism (CDM) of the Kyoto Protocol, aimed at reducing the

greenhouse gas emissions of industrialized countries, could become an important source

of new finance for projects in developing countries. Developed country firms can begin

meeting their reduction targets by funding emission reduction projects in the developing

world and contribute to sustainable development in the process (UNCTAD 2005). The

CDM, creates "win-win-win" synergies for the sustainable development of developing

countries, by encouraging additional FDI flows to complement local financing of projects

that contribute to local sustainable development. Brazil, China and India have the greatest

potential for the new mechanism. Brazil was one of its pioneers, having proposed the

initial concept and hosted the first such project. India has developed more CDM

methodologies and project proposals than any other country (Ibid.)




                                             37
Countries that rely heavily on coal for their energy needs and/or countries where the

major energy users (e.g., power plants and heavy industries) are relatively energy-

intensive and inefficient would have the greatest potential for large and cheap CDM

projects. By this token, both China and India can expect a relatively large share of the

CDM market – together, they are projected to account for about 60 per cent of non-sink

CDM projects (47 per cent and 12 per cent respectively). It is, therefore, certain that

whatever the nature and scope of CDM projects that emerge globally, major coal-based

GHG emitters such as China and India will play an important role (Gupta 2003).



Despite near-term uncertainty about the size of the CDM market and the price of

Certified Emissions Reductions (CERs), it is very likely that India will be a major player.

This is also true in the long run where India along with other developing countries may

take on some commitments and where emissions trading may be an important component

of the GHG abatement architecture. While there are several issues of concern such as the

impact of technical progress in abatement technologies on the gains from emissions

trading for India, on the whole it may stand to benefit from participating in such trading.

Furthermore, there are good prospects of convergence across CDM and emissions trading

both in a short-run and in the long-run (Ibid.).



Domestic companies produce much of what India needs by way of EGS. But their

expertise is, however, limited in many cases and around 40% of the requirements are

fulfilled by imports. However, most of the demand forecasts are based on large




                                             38
manufacturing units‘ requirements. India has an estimated three million small-scale

industrial units, which account for over 40% of the industrial output in terms of value, but

their share of industrial pollution is disproportionately high. Smaller industries have the

added burden of using obsolete, inefficient production processes, which are typically

more polluting. In the future if these companies have to improve their environmental

compliance, the demand for financial support will become very high.

Indian environmental companies face significant hurdles, which not only deter them from

exporting their products but also deter them from catering to the domestic demand. Some

of the problems that Indian companies face include:

      shortages of essential environmental goods such as membranes, activated carbon,

       resins, and other components;

      limited R&D capability for technological improvements; limited servicing

       capability;

      limited access to available technologies and potential foreign partners;

      high capital costs for expansion;

      limited domestic market in sub sectors;

      lack of servicing and marketing network in other countries.



There are many smaller firms that specialize in sector-specific equipments such as air

pollution monitoring, wastewater treatments, etc. Several smaller companies offer

environmental consulting services related to environmental management systems

facilitation, environmental audits, environmental impact assessment and development of

environmental standards. Trade liberalization through the WTO is likely to create many



                                             39
challenges for smaller domestic companies with one or two product lines. Their products

cannot compete with technically superior products from large companies. Moreover, they

are unable to tap overseas markets in many cases due to the absence of marketing and

servicing networks.



Environmental services in R&D, design, and technology, which are an integral part of the

environment equipment sector, are relatively poor in India. For instance, companies like

Bharat Heavy Electricals Limited (BHEL) focus mostly on product-application research

rather than basic research, and thus basic technology for equipment manufacture like

gasifiers and fuel cells need to be imported.



Indian firms offering environmental services do so as part of the equipment supply,

especially for air pollution management solutions in power plants and vehicular pollution

abatement. However, the Indian environment industry needs the technology (not

equipment per se) and state of the art design for pollution management equipment, since

the industry is capable of manufacturing the hardware domestically. Given the growth of

Indian economy and high rate of urbanization, India needs massive capital to build its

environmental infrastructure, particularly for water supply and treatment, sewage

treatment, and solid waste management. The onus of providing environmental

infrastructure services is with the Urban Local Bodies. However, financial constraints of

these bodies have been a major problem towards ensuring adequate provisions of services

such as sewage, sanitation, cleaning of roads, and water supply.




                                                40
In the large projects funded by multilateral organizations, there are several conditions for

eligibility that keep most of the Indian companies out of these projects. These strict

eligibility criteria include past record, experience, turnover, product specifications, and

third party guarantees Indian companies have to face several constraints due to their

limited R&D capability for technological improvements, limited servicing capability, and

high capital costs for expansion. Most of these companies being smaller do not have large

marketing networks.



5.0 Conclusions and Recommendations

The picture that emerges of the environment industry is one of an integrated, technology-

intensive, globalised industry, which predominates principally in developed countries.

The industry has largely been driven by enforcement of environmental regulations, and in

this respect, developing countries are struggling to catch up.



Developed countries, particularly US, EU and Japan are the largest producers, consumers

and exporters of EGS. Developing countries are net importers of EGS. However, the EGS

sector in developing countries is growing at a much faster rate than in developed

countries. This makes developing countries markets important.



Developed countries are pushing for the opening up of the EGS sector since they perceive

different advantages from the opening of the EGS sector for developing countries. For

example, in the first submission to the Committee on Trade and Environment Special

Session and fifth submission to the NAMA negotiating group on 17th February 2005, the




                                             41
European Communities wished to liberalize trade in EGS to bring economic,

environmental and developmental benefits. They argued that in all countries, changes in

consumption patterns and demand for greener products should be encouraged by opening

up markets to environmental products from both developed and developing countries.

Liberalizing trade in EGS would support and reward producers in all countries that invest

in environmentally friendly practices, cleaner technologies and equipment with a view to

meeting environmental objectives, related responsible corporate policies and/or

consumers‘ demand. Supporting the development of environmental markets would also

foster technological innovation and job creation in a dynamic industry. Moreover, for

developing countries, it should help make available cheaper environmental technologies

and related services needed to meet their developmental and environmental objectives,

while satisfying basic human needs, such as improved access to safe water, sanitation or

clean energy.

A note by the UNCTAD Secretariat on EGS in Trade and Sustainable Development

reveals that ―direct trade gains from liberalization in EGS may flow largely to the more

advanced WTO Members, which stand to benefit from improved access to expanding

EGS markets in developing countries. Efforts should be made to increase the potential

for direct trade gains for developing countries‖ (WTO 2004).



When WTO members are negotiating commitments in their respective schedules, the aim

should be two-fold: (a) to liberalise market access in sectors and modes of supply of

export interest to developing countries; and (b) to strengthen developing countries‘




                                            42
capacity in domestic services (including access to technology) and improve developing

country access to information networks.



As a negotiation strategy for EGS, developing countries should not be wary of making

trade-offs. They may be able to advance their trade and environment agendas in the

negotiations, provided they can forward plan and co-operate amongst themselves.

Developing countries should take a two-pronged approach. They should examine the

extent to which trade liberalization may enhance the availability of EGS used to address

national environmental problems; and decide



   (a)     which negotiated outcomes they wish to see emerge from EGS; and



   (b)     how to derive real sustainable development outcomes from the result of their

           negotiations.



Under the first approach, they must initially establish which pressing environmental

problems they wish to resolve through access to EGS, and second, what desired level of

market access they wish to achieve for their own EGS in foreign markets. Thereafter,

they can match these goals with the relevant products and services and demand specific

inclusion of such goods and services in the classifications to be determined in the WTO.



In the second approach, developing countries should have worked out, in advance, how

the achieved results of the negotiations will assist in providing real environmental quality




                                             43
on the ground. For this, they must have in place plans for domestic regulation, covering

environmental protection (including, for example, environmentally sound technologies,

eco-labelling, etc.), infrastructure development, government procurement, intellectual

property rights, and in some cases, even health and sanitation. They must also have

strategies regarding international trade in order to continue to maintain their hard won

market access. This may cover issues such as dispute settlement, subsidies, TBT, SPS

measures and technical co-operation (CUTS 2004a).



Developing countries will have to fully understand their capacity-building and technical

assistance needs, in order to ensure that such assistance is well targeted and applied to

support their environmental protection and trade objectives. In this way, developing

countries may be able to achieve the ‗win-win-win‘ scenarios that are implied by the

negotiations on liberalization of EGS.



Moreover, the integrated manner in which traditional EGS are delivered is not reflected

in the way the WTO classifies such goods or disciplines trade in these goods. The

multiple uses of such goods and services (where it is unclear whether there is a clear

environmental benefit from use or delivery) may cause problems in defining and

classifying such goods and services, as well as assigning them specific HS (Harmonised

System) codes to differentiate them from other goods.



It is vital that developing countries develop both their own lists of products of export

interest including organic agricultural products or products from traditional knowledge or




                                             44
folklore and an alternative list of environmental services in which they hold comparative

advantage.



The WTO has been focusing on the elimination of trade barriers of sustainable resources

and activities with a view to promoting the global living environment by further

liberalizing trade in environmental goods. With the reduction or, as appropriate,

elimination of trade barriers and increased trade flows, domestic purchasers will be able

to acquire environmental goods and technologies at lower costs. The savings will help

business and governments to stretch their capital investment budgets further, which could

consequently help to ensure the mutual supportiveness between the environment and the

promotion of sustainable development.



Merely tariff reduction on end-of-the-pipe pollution control equipment will not lead to

much needed technology transfer. On the other hand it may even adversely affect transfer

of technology to India. In India, the most preferred and effective route of transfer of

technology has been joint ventures. Therefore, any effort to reduce tariffs should take into

account the fact that liberalization should not become an incentive for companies of

developed nations to take a trading route rather than transferring technology to

manufacture pollution control equipment in India.



The lists proposed so far to a large extent do not cover products of interest to developing

countries. It is important to note here that the provisions and mandate of paragraph 16 of

the Doha Declaration is applicable to environmental goods. Paragraph 16 specifically




                                             45
mandates special attention to ―products of export interest to developing countries‖ and

takes full account of the special needs and concerns of developing and least developed

countries. Therefore India should insist that the negotiations must focus on how

developing countries can derive trade gains in terms of increased exports in this sector.

The special needs also include protection of domestic industry, which is largely

comprised of small and medium enterprises. Many biodiversity-rich developing

countries, for example, have great potential for deriving commercial and developmental

benefits from environmental services provided by their ecosystems. In most cases,

however, the economic value of such services has not been established. Numerous

ongoing studies and projects focus on valuation techniques and instruments to

commercialize such services.



Developing countries may have to coordinate and communicate between trade-

negotiators and regional policy makers (trade, industry, agriculture, environmental,

municipal authorities) as well as among various national stakeholders. Some elements

which they have to consider are as follows:

   In case organic products (based on whatever criteria) are negotiated as part of the

    EGS mandate on an accelerated basis, then the relationship to agricultural

    liberalisation modalities (export subsidies, domestic support) on non-organic products

    will have to be defined.

   As EGS are frequently inter-linked it may be important to coordinate market access in

    both areas. For example: opening up the solid waste treatment services sector while

    maintaining high tariffs and non-tariff barriers (NTBs) on waste-treatment equipment




                                              46
    may not result in meaningful market-access unless perhaps the developing country

    has an adequate and competitive domestic environmental goods sector which could

    supply these services.

   Liberalisation of goods having multiple end-uses (including environmental uses)

    requires careful consideration as it may be difficult to verify the intended ‗end-use‘

    for such goods.

   Tariff levels for most industrial goods are low in developed countries. NTBs may be

    more important, for example labelling, subsidies, taxes. Identifying and negotiating

    removal of these various NTBs will take time. This needs to be kept in mind given

    the time-horizon of completing the Doha negotiations as well as any accelerated

    liberalisation, if accepted, of EGS. The challenge will increase if agricultural goods

    are also negotiated (Suathan 2004).



This case study of India reveals that India may not get too many advantages out of the

opening up of environmental sector in the short run. Analysis of data reveals the

following:

       Environmental goods constitute a very insignificant share of India‘s total exports

        and imports.

       Balance of trade is also deficit for most of the items.

       Major destinations for environmental goods for many items are developing

        countries.

       There is no consistency in their import demand.




                                              47
      India has revealed comparative advantage in only 4 items out of the top 20 export

       items.

      The highest growing export items do not have any revealed comparative

       advantage.

      India‘s tariffs are higher than developed countries on environmental goods and

       reduction in tariffs may create disincentives for foreign firms to establish

       subsidiaries in India.

      Most of the items, which developed countries are insisting for inclusion, belong to

       the category of multiple uses.

      Unless the items of interest for India are included in the list of environmental

       goods, India may not benefit from the liberalization of the EGS sector in the short

       term. Potential benefits of liberalization of EGS will have to be examined in the

       context of FDI in the long run.



India can benefit from the negotiations if the criteria for inclusion of a particular product

category or a product is based on:

(i) Use of the product/category in pollution control activities;

(ii) Dynamic comparative advantage of India in that product/category which would be

based on existing levels of import and export, size of domestic market, efficiency level of

domestic industry and prospects for future;

(iii) The degree of use in the environmental sector vis-à-vis other industrial sectors.



The project approach suggested by India may benefit developing countries because:



                                              48
   This approach is cohesive and integrated – goods and services.

   It is focused and direct – to the goals of environmental objectives.

   It can accommodate the changing needs of global environmental requirements.

   Some of the positive measures include:

     Technology transfer – with the services, leading to capacity building.

     Does not affect market access schedules of the goods – does not lead to ―zero-for-

       zero‖ sectoral NAMA negotiations.

     It also enhances mutual supportiveness of trade and environment – Paragraph

       31(iii) objective ( Kumar 2002).




                                             49
Statistical Formulae

Revealed Comparative Advantage Index

Measures of revealed comparative advantage (RCA) can be used to help assess a

country's export potential. The RCA indicates whether a country is in the process of

extending the products in which it has a trade potential, as opposed to situations in which

the number of products that can be competitively exported is static. It can also provide

useful information about potential trade prospects with new partners. Countries with

similar RCA profiles are unlikely to have high bilateral trade intensities unless

intraindustry trade is involved. RCA measures, if estimated at high levels of product

disaggregation, can focus attention on other nontraditional products that might be

successfully exported. The RCA index of country i for product j is often measured by the

product's share in the country's exports in relation to its share in world trade:

RCAij = (xij/Xit) / (xwj/Xwt)

where xij and xwj are the values of country i's exports of product j and world exports of

product j and where Xit and Xwt refer to the country's total exports and world total

exports. A value of less than unity implies that the country has a revealed comparative

disadvantage in the product. Similarly, if the index exceeds unity, the country is said to

have a revealed comparative advantage in the product.

Compound Annual Growth Rate (CAGR)

Interest rate at which a given present value would "grow" to a given future value in a

given amount of time. The formula is -

CAGR = (FV/PV)1/n - 1

where FV is the future value, PV is the present value, and n is the number of years.




                                              50
References

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Cattafesta, Catherin (2003) ―Diagnostico preliminar, República Dominicana”. Study
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Chaytor, Beatrice (2003) ―The State of Trade and Environment Negotiations within the
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Chimni, B.S. (January 12, 2003) ―WTO and Environment Legitimisation of Unilateral
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Henriksen, Anna (1998) Voluntary Environmental Labelling and the World Trade
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Howse, Robert (1998) ―Turtles Panel: Another Environmental Disaster in Geneva‖
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                                         51
Joshi, Manoj (2004) ―Are Eco-Labels Consistent with World Trade Organization
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Kumar, Sanjay, Director, MOC (August 11-12, 2002) “Approaches to the negotiations
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Sawhney, Aparna and Chanda, Rupa (May 2003) “Trade in Environmental Services:
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Singh, Sandeep (2004a) “Trade Preferences and Growth of Environmental Industry:
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Delhi.
www.teriin.org/discussion/environ/trade.pdf




                                         52
Singh, Sandeep (2004b) ―Trade Preferences and Growth of Environmental Industry:
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                                           53
Joshi, Manoj, Trade Liberalization in Environmental Goods: Indian Perspective,
available  at    http://r0.unctad.org/trade_env/test1/meetings/egs/PPT-INDIA-JOSHI-
Expert%20Meeting%20UNCTAD%20EGS_26-06-03.pdf

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http://www.teriin.org/events/docs/envgoods/env11.pdf

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http://www.wto.org/english/thewto_e/whatis_e/tif_e/doha1_doha/_e.htm

UNCTAD/PRESS/PR/2005/010 - 15/02/05

Database

―India‘s Exports & Imports of Environmental Goods as per APEC List‖, ITC, CMIE
Database.




                                        54
Annex 1. Trade balance of Indian Environmental Goods as per APEC List

                                                            Rs.Lakh        Trade Balance
Commodity                                                   Annual      (in Rs lakh) in 2003
                     Commodity Name
  Code                                                      Dec-03
                                                                val
  460120        Mats, matting and screens of       Export   1601.41          1588.01
                      vegetable materials          Import      13.4
  560314         Man-Made Filmnt Wghng             Export    165.08           -667.62
                          >150G/Sqm                Import     832.7
  591190         Other(textile products and        Export    266.56          -4132.21
                            articles)              Import   4398.77
  690210       Refractory bricks, blocks, tiles    Export   1634.77          -6017.24
              and similar goods containing by
              weight, singly or together, more
                  than 50% of the elements         Import   7652.01
                    magnesium, calcium or
                   chromium, expressed as
             magnesium oxide, calcium oxide
                             oUNIT
  690220       Refractory bricks, blocks, tiles    Export   5161.49          4620.49
              and similar goods containing by
             weight, more than 50% of alumina      Import    541
               (al2o3), of silica (sio2) or of a
               mixture of compound of these
                            products.
  690290      Other refractory bricks, blocks,     Export    784.21          -5075.65
                            tiles etc.             Import   5859.86
  690310      Other refractory ceramic goods       Export   1140.93           947.44
              containing by weight more than
             50% of graphite or other forms of     Import   193.49
               carbon or of a mixture of these
                            products.
  690320      Other refractory ceramic goods       Export   986.64            -791.26
              containing by weight more than
                50 % of alumina (aluminium
                   oxide) or of a mixture or       Import   1777.9
                compound of alumina and of
                    silica (silicon dioxide)
  690390      Other refractory ceramic goods       Export   2772.16           -243.57
                                                   Import   3015.73
  690919          Other ceramic wares for          Export    203.7            -786.7
                      laboratory etc.              Import    990.4




                                         55
701710    Laboratory glasses etc of fused     Export    34.86      -35.01
              quartz or other fused
                                              Import    69.87
701720               Laboratory               Export     3.73     -211.11
              hygienic/pharmaceutical
         glassware of other glass having a    Import    214.84
         linear coeffcient of expansion not
         exceeding 5X10 -6/ Kelvin within
         a temperature between 0 degree C
                  to 300 degree C.
701790            Other laboratory,           Export   3075.15    1978.52
              hygienic/pharmaceutical         Import   1096.63
                      glassware
840410     Auxlry Plnt Usd with Boilrs of     Export   2083.83    1718.81
                      8402/8403               Import    365.02
840420    Condensers for Steam/other Vpr      Export    249.74    -554.97
                     Powr Units               Import    804.71
840510       Produced gas or water gas        Export    533.25     -433.4
          generators with or without their
         purifiers acetylene gas generators
            and similar water process gas     Import    966.65
          generators with or without their
                       purifiers
840991        Suitable for use solely or      Export   25206.44   6877.49
           principally with spark-ignition
             internal combustion piston
                       engines.               Import   18328.95
840999    Other(parts suitable for engines)   Export   38412.71   -5029.01
                                              Import   43441.72
841011     Hydraulic Turbines & Water         Export    221.63    221.63
         Wheels of a Power not Exceeding      Import
                     1000 Kw
841012    Of a power not exceeding 1,000      Export    50.34      50.34
         kW but not exceeding 10,000 kW       Import
841013   Of a power exceeding 10,000 kW       Export    20.95      20.95
                                              Import
841090     Parts of Hydrlic Turbnes incl.     Export    606.94    -641.83
                     Regulators               Import   1248.77
841360   Other rotary positive displacement   Export    878.19    -1006.27
                       pumps                  Import    1884.46
841370       Other centrifugal pumps          Export   13830.45   6286.27
                                              Import   7544.18




                                     56
841381                 Pumps                   Export   1646.12    -13080.31

                                               Import   14726.43
841410            Vacuum Pumps                 Export    545.12    -2738.67
                                               Import    3283.79
841459     Other(air or vacuum pumps)          Export    1104.89   -4216.74
                                               Import    5321.63
841480     Other(air or vacuum pumps)          Export    3623.35   -15622.17
                                               Import   19245.52
841780       Other Furnaces & Ovens            Export      261.6   -2384.51
                                               Import    2646.11
841790    Parts of Non Electric Furnaces       Export     512.42   -1223.87
                     Ovens etc                 Import    1736.29
841919    Instantaneous or storage water       Export     188.16    -211.44
           heaters, non-electric - Other       Import      399.6
841940     Distilling or rectifying plant      Export     411.89   -10205.89
                                               Import   10617.78
841950          Heat exchange units            Export    1521.91   -2073.19
                                               Import    3595.1
841960       Machinery for Liquefying          Export    335.67    -1205.17
                 Air/other Gases               Import   1540.84
842119     Centrifuges, incl. centrifugal      Export    2527.8     -184.62
                   dryers, Other               Import   2712.42
842121     Centrifuges, incl. centrifugal      Export   1513.42     -245.84
          dryers, for filtering or purifying   Import   1759.26
                         water
842129     Centrifuges, incl. centrifugal      Export    835.7     -5161.73
                    dryers, other              Import    5997.43
842139   Filtering or purifying machinery      Export     480.36   -6379.24
             and app. for gases, other         Import     6859.6
842191       Parts, of centrifuges, incl.      Export      678.5    -657.27
                 centrifugal dryers.           Import    1335.77
842199              Parts, other               Export    3847.08   -12188.33
                                               Import   16035.41
842220      Machinery for Clng/Dryng           Export     664.88    121.04
                Botls/other Cntnrs             Import     543.84
842833   Other Continuous Action Elevatrs      Export       1.35    -474.99
                 & Conveyrsfor                 Import    476.34
            Goods/Materials,Belt Type
843680           Other machinery               Export    566.03     512.87
                                               Import     53.16


                                       57
846291           Hydraulic presses              Export    1156.19    -1088.3
                                                Import    2244.49
847290         Other office machines            Export    2008.91   -16770.12
                                                Import   18779.03
847410   Sorting, screening, separating or      Export     294.93   -1655.44
                washing machines                Import    1950.37
847432    Mchns for Mxng Mnrl Substncs          Export      64.47   -7361.04
                   with Bitumen                 Import    7425.51
847982      Mxng, Kneadng, Crushng,             Export      1149    -2267.35
             Grndng, Screng, Siftng,
                                                Import   3416.35
         Homogensng, Emulsifyng/ Stirrng
                      Mchns
847989    Other ( machines or mechanical        Export   19150.42   -37526.68
                    appliances)                 Import    56677.1
847990                  Parts                   Export   31927.81   12449.19
                                                Import   19478.62
850231     Other generating sets; wind          Export     143.55    -495.39
                     powered                    Import     638.94
850590   Electro magnets; chucks, clamps        Export    1807.06   -1735.89
                 & similar devices              Import   3542.95
851410     Resistance heated furnaces &         Export     91.11     -179.1
                      ovens                     Import    270.21
851420    Induction/dielectric furnaces &       Export    378.35     282.03
                      ovens                     Import     96.32
851430       Other furnaces and ovens           Export    870.62     -217.97
                                                Import   1088.59
851490     Parts of articles of industrial or   Export    577.53     -744.22
            laboratory electric (including
          induction or dielectric) furnaces     Import   1321.75
            and ovens; other industrial or
         labortatory induction or dielectric
                  heating equipment
854140     Photosensitive semi-conductor        Export   33239.71   26338.09
          devices, including photovoltaic
         cells whether or not assembled in      Import   6901.62
          modules or made up into panels;
                light emitting diodes
854389                 Other nes                Export    2762.48   -34892.8
                                                Import   37655.28
890710            Invlatable Rafts              Export      40.96    -116.96
                                                Import     157.92
890790       Other floating structures          Export      24.35    -199.17



                                       58
                                               Import    223.52
901540   Photogrmtrcl Survying Instrmnts       Export               -405.9
                   & Applncs                   Import      405.9
901580   Othe instruments and appliances.      Export     794.42   -9206.75
                                               Import   10001.17
901590         Parts & Accessores of           Export    1142.41   -1192.93
         Surveying,Phtogrmcl,Hydrogrphic
          Instrumnts etc. excl. Compasses      Import   2335.34
902229         Apprts Bsd On Use of            Export    199.58    -1149.86
          Alpha,Bta/Gma Radtns for other
          Usesincl Rdogrphy & Rdothrpy         Import   1349.44
                       Apprts
902290       Other, including parts and        Export   12608.93   -7810.79
                     accessories.              Import   20419.72
902511    Liquid-filled, for direct reading.   Export     273.56     -1.84
                                               Import      275.4
902519    Other ( hydrometers and similar      Export     134.02    -811.51
                loating instruments)           Import     945.53
902580           Other instruments             Export       44.4   -1218.42
                                               Import    1262.82
902590   Parts & Accssrs of Instruments of     Export     209.51   -1321.23
                    Hdg 9025                   Import    1530.74
902610    For measuring or checking the        Export    2674.17   -4058.64
              flow or level of liquids.        Import    6732.81
902620      For measuring or checking          Export    1211.68   -4492.09
                     pressure.                 Import    5703.77
902680    Other instruments or apparatus.      Export     208.93   -4167.91
                                               Import    4376.84
902690   Parts&Accssrs of Insrmnts/Apprts      Export     712.36   -6083.23
                  of Hdg9026                   Import    6795.59
902710    gas or smoke analysis apparatus.     Export     643.21   -4731.64
                                               Import    5374.85
902720          Chromatographs &               Export      24.13   -12663.7
              Electrophoresis Instrmnt         Import   12687.83
902730         Spectrometers, spectro-         Export    118.69    -13201.97
           photometers and spectographs
                                               Import   13320.66
            using optical radiations (UV,
                     visible, IR)
902740            Exposure Meters              Export                -9.43
                                               Import     9.43
902750    Other instruments and apparatus      Export    178.77    -2133.64
           using optical radiations (UV,       Import   2312.41


                                     59
                      visible, IR)
902780     Other instruments and apparatus.     Export    523.94    -28704.57
                                                Import   29228.51
902790          Microtomes; parts and           Export     315.46   -14237.41
                    accessories.                Import   14552.87
902810               Gas Meters                 Export     567.35     142.7
                                                Import     424.65
902820               Liquid Meters              Export      23.46    -133.94
                                                Import      157.4
902830             Electricity Meters           Export    2171.73    -7676.6
                                                Import    9848.33
902890     Parts and Accessories of Gas Lqd     Export       185    -3284.77
           or Electricty Supply or Production   Import   3469.77
                          Meters
90301000      Instrument and Apparatus for      Export    544.85     -477.69
            Measuring or Detecting Ionising     Import   1022.54
                        Radiation
903020       Cathode-ray oscilloscopes and      Export     27.95    -2086.01
                cathode-ray oscillographs.      Import   2113.96
903031                 Multimeters              Export    127.82     -637.3
                                                Import    765.12
903039      Other ( oscilloscopes and other     Export   5681.63     -839.07
             instruments for measuring or
                                                Import    6520.7
             checking electrical quantities
                   excluding meters)
903083     Other with a recording device, nes   Export     26.97     -907.8
                                                Import    934.77
903089      Other ( oscilloscopes and other     Export    107.46    -5960.91
             instruments for measuring or       Import   6068.37
             checking electrical quantities
                   excluding meters)
903090           Parts and accessories.         Export   1340.63    -4319.31
                                                Import   5659.94
903110          Machines for Balancing          Export    157.59     -687.08
                  Mechanical Parts              Import    844.67
903120              Test Benches                Export    165.23    -2042.03
                                                Import   2207.26
903130             Profile Projectors           Export     17.27    -2315.97
                                                Import   2333.24
903180         Other Msrng&Checking             Export    615.76    -48691.18
              Instrmnts,Applncs&Mchns           Import   49306.94
903190     Parts and Accessories of Instrmnts   Export    749.43    -14732.15
                        of 9031                 Import   15481.58


                                        60
   903210                 Thermostats                Export         277.75         -1739.97


                                                     Import        2017.72
   903220                  Manostats                 Export          0.11           -180.55
                                                     Import          180.66
   903281       Hydraulic/Pneumatic Instrumnts       Export          344.05          34.27
                         & Apparatus                 Import          309.78
   903289       Other ( automatic regulating or      Export         2710.31        -18426.77
                   controlling instruments)          Import        21137.08
   903290      Parts and Accessories of Instrmnts    Export         559.56         -12111.25
                            of 9032                  Import        12670.81
    9033           Parts and accessories (not        Export         9971.28        -28605.07
               specified or included elsewhere in
                  this Chapter) for machines,        Import        38576.35
                   appliances, instruments or
                    apparatus of Chapter 90.
                     Subtotal of Exports of          Export       265270.22        -418399
                      environmental goods
                     Subtotal of Imports of          Import       683669.22
                      environmental goods
                      Total Export of India          Export      25513727.71      -4206859.77
                      Total Import of India          Import      29720587.48

Trade Balance calculated on the basis of data extracted from Indiatrades


Annex 1A. Share of Export and Import of Indian Environmental Goods as per
APEC List

                         Rs.Lakh         Rs.Lakh        Rs.Lakh        Rs.Lakh      Rs.Lakh
                         Annual          Annual         Annual         Annual       Annual
                         Dec-99          Dec-00         Dec-01         Dec-02       Dec-03
                           val             val            val            val          val
 Subtotal of Exports    106309.15       122241.93      179428.21      211944.11    265270.22
  of Environmental
       Goods
 Percentage in Total       0.01            0.01           0.01             0.01       0.01
       Export
 Subtotal of Imports    455218.25       453225.83      489700.14      534806.43    683669.22
  of Environmental
       Goods
 Percentage in Total       0.03            0.02           0.02             0.02       0.02
       Import


                                           61
    Total Export       13922431.00 15902332.51 20357101.17 20901388.03 25513727.71
    Total Import       17792711.00 20387535.68          23.87275.91   24519971.60 29720587.48

Share of Exports calculated on the basis of ITC data



Annex 2. Major Destinations for India's Imports and Exports of Environmental
Goods as per APEC List

                                                              Export
                                                                                          Major
Commodity                                                      Value     Major Export
                          Commodity Name                                                  Import
  Code                                                       2003 (Rs.   Destinations
                                                                                        Destinations
                                                               Lakh)
   460120      Mats, matting and screens of vegetable          1601.41 EU, USA, UK,     Viet Nam,
               materials                                               Germany,         UAE, Japan
                                                                       Netherlands
   560314      Man-Made Filmnt Wghng >150G/Sqm                  165.08 EU, Belgium,     Taiwan
                                                                       Sri Lanka,       (Taipei),
                                                                       Puerto Rico,     UK, China,
                                                                       UAE              Hong Kong,
                                                                                        Italy
   591190      Other (textile products and articles)           266.56 EU, USA, UAE,     Germany
                                                                      Sri Lanka,
                                                                      Greece
   690210      Refractory bricks, blocks, tiles and           1634.77 Malaysia, Korea   Germany,
               similar goods containing by weight,                    Republic          China,
               singly or together, more than 50% of the               (South), Egypt,   Austria
               elements magnesium, calcium or                         Brazil,
               chromium, expressed as magnesium                       Indonesia,
               oxide, calcium oxide oUNIT                             Algeria
   690220      Refractory bricks, blocks, tiles and           5161.49 Bangladesh, EU    Germany
               similar goods containing by weight,
               more than 50% of alumina (al2o3), of
               silica (sio2) or of a mixture of compound
               of these products
   690290      Other refractory bricks, blocks, tiles etc.     784.21 EU, Sri Lanka,    China,
                                                                      UK, Spain         Germany,
                                                                                        Australia,
                                                                                        Austria
   690310      Other refractory ceramic goods                 1140.93 Bangladesh,       Germany,
               containing by weight more than 50% of                  Thailand,         China
               graphite or other forms of carbon or of a              Indonesia, EU,
               mixture of these products                              Australia




                                            62
690320   Other refractory ceramic goods               986.64 Algeria, EU,     Germany,
         containing by weight more than 50 % of              Egypt, Iraq,     UK, Italy,
         alumina (aluminium oxide) or of a                   Germany          USA,
         mixture or compound of alumina and of                                Taiwan
         silica (silicon dioxide)                                             (Taipei)
690390   Other refractory ceramic goods              2772.16 Germany,         Germany,
                                                             Turkey, USA,     UK, Taiwan
                                                             Iran             (Taipei)
690919   Other ceramic wares for laboratory etc.       203.7 Ethiopia,        Malaysia
                                                             Nigeria, USA,
                                                             Australia
701710   Laboratory glasses etc of fused quartz or     34.86 Nigeria, Oman,   Malaysia,
         other fused                                         Brazil           USA
701720   Laboratory hygienic/pharmaceutical             3.73 Nepal, UAE       China,
         glassware of other glass having a linear                             Singapore,
         coeffcient of expansion not exceeding                                Czech
         5X10 -6/ Kelvin within a temperature                                 Republic,
         between 0 degree C to 300 degree C                                   Germany
701790   Other laboratory,                           3075.15 Iraq             Germany,
         hygienic/pharmaceutical glassware                                    France
840410   Auxlry Plnt Usd with Boilrs of              2083.83 USA, Malaysia,   Belgium
         8402/8403                                           Taiwan
840420   Condensers for Steam/other Vpr Powr          249.74 Thailand,        Germany
         Units                                               Colombia, USA,
                                                             Pakistan
840510   Produced gas or water gas generators         533.25 Iran             Germany,
         with or without their purifiers acetylene                            USA, UK,
         gas generators and similar water process                             Poland,
         gas generators with or without their                                 France
         purifiers
840991   Suitable for use solely or principally      25206.44 USA, Germany    Japan, Korea
         with spark-ignition internal combustion                              Republic
         piston engines                                                       (South),
                                                                              Germany,
                                                                              UK
840999   Other(parts suitable for engines)           38412.71 USA, Germany,   USA, UK,
                                                              UK              Japan
841011   Hydraulic Turbines & Water Wheels of          221.63 Iraq            Japan, USA
         a Power not Exceeding 1000 Kw
841012   Of a power not exceeding 1,000 kW but         50.34 Laos             Japan
         not exceeding 10,000 kW
841013   Of a power exceeding 10,000 kW                20.95 USA              Korea
                                                                              Republic
                                                                              (South)
841090   Parts of Hydrlic Turbnes incl.               606.94 Viet Nam,        Norway
         Regulators                                          Germany, USA


                                      63
841360   Other rotary positive displacement         878.19 Germany, USA,     Germany,
         pumps                                             UAE, UK           USA, Japan,
                                                                             Switzerland,
                                                                             UK
841370   Other centrifugal pumps                   13830.45 UAE, Germany,    Japan,
                                                            USA, Iraq,       Germany,
                                                            Egypt            Singapore,
                                                                             Netherlands,
                                                                             France, USA
841381   Pumps                                     1646.12 Germany, USA,     USA,
                                                           Taiwan, Saudi     Germany,
                                                           Arabia, UAE       Japan, UK
841410   Vacuum Pumps                               545.12 France, USA,      Germany,
                                                           UK, Malaysia      Italy, USA,
                                                                             Korea
                                                                             Republic
                                                                             (South)
841459   Other(air or vacuum pumps)                1104.89 USA               USA,
                                                                             Germany,
                                                                             China, Italy
841480   Other(air or vacuum pumps)                3623.35 Iraq, Korea       USA, Japan
                                                           Republic (South)
841780   Other Furnaces & Ovens                      261.6 Thailand         Japan,
                                                                            Canada,
                                                                            Germany,
                                                                            Netherlands
841790   Parts of Non Electric Furnaces Ovens       512.42 China, Sri       Germany,
         etc                                               Lanka,           Australia,
                                                           Bangladesh,      Italy, Japan,
                                                           Nigeria          France
841919   Instantaneous or storage water heaters,    188.16 Nigeria,         USA, China,
         non-electric - Other                              Indonesia,       Australia,
                                                           Turkey,          Germany,
                                                           Malaysia         Switzerland
841940   Distilling or rectifying plant             411.89 Mexico, Nigeria, Germany
                                                           Iran, Trinidad
                                                           and Tobago,
                                                           Bangladesh
841950   Heat exchange units                       1521.91 Saudi Arabia,    USA, Italy,
                                                           Qatar, Nigeria,  Germany,
                                                           Thailand         UK, France
841960   Machinery for Liquefying Air/other         335.67 Bangladesh,      Russia,
         Gases                                             Oman, Nigeria    Switzerland,
                                                                            Netherlands,
                                                                            France
842119   Centrifuges, incl. centrifugal dryers,     2527.8 USA, Oman,       Germany,


                                          64
         Other                                                Italy              USA
842121   Centrifuges, incl. centrifugal dryers, for   1513.42 Malaysia, USA,     USA,
         filtering or purifying water                         Iran, Nigeria      France,
                                                                                 Japan,
                                                                                 Germany
842129   Centrifuges, incl. centrifugal dryers,         835.7 Korea Republic,    USA,
         other                                                USA                Germany,
                                                                                 Japan
842139   Filtering or purifying machinery and          480.36 Saudi Arabia,      USA,
         app. for gases, other                                USA, Sri Lanka     Thailand,
                                                                                 South
                                                                                 Africa,
                                                                                 Germany
842191   Parts, of centrifuges, incl. centrifugal       678.5 Germany, USA       Germany,
         dryers                                                                  USA, South
                                                                                 Africa,
                                                                                 Sweden
842199   Parts, other                                 3847.08 USA, Oman,         USA,
                                                              Indonesia          Germany,
                                                                                 UK, Japan
842220   Machinery for Clng/Dryng Botls/other          664.88 Qatar, Germany,    Italy
         Cntnrs                                               UAE, Nigeria
842833   Other Continuous Action Elevatrs &              1.35 Zimbabwe           Japan
         Conveyrsfor Goods/Materials,Belt Type
843680   Other machinery                               566.03 Malawi             Italy, USA,
                                                                                 Germany,
                                                                                 Japan
846291   Hydraulic presses                            1156.19 South Africa,      Italy, Korea
                                                              Greece, Nigeria,   Republic
                                                              UAE, Korea         (South),
                                                              Republic           Germany,
                                                              (South), Iran      Taiwan
                                                                                 (Taipei)
847290   Other office machines                        2008.91 Japan, UAE,        UK, USA,
                                                              Indonesia, Iran,   Germany
                                                              Italy
847410   Sorting, screening, separating or             294.93 Iran               Germany,
         washing machines                                                        UK
847432   Mchns for Mxng Mnrl Substncs with              64.47 Malaysia           Korea
         Bitumen                                                                 Republic
                                                                                 (South)
847982   Mxng,Kneadng,Crushng,Grndng,Screng,            1149 Bangladesh          Germany,
         Siftng,Homogensng,Emulsifyng/Stirrng                                    France,
         Mchns                                                                   USA,
                                                                                 Switzerland



                                       65
847989   Other (machines or mechanical              19150.42 USA, UAE,         Germany
         appliances)                                         Nigeria,
                                                             Indonesia,
                                                             China,
                                                             Bangledesh
847990   Parts                                      31927.81 USA, UK,          Germany,
                                                             Germany, Italy,   USA, Japan,
                                                             Nigeria           Philippines,
                                                                               UK
850231   Other generating sets; wind powered          143.55 Japan, Malagasy   Germany,
                                                                               Denmark
850590   Electro magnets; chucks, clamps &           1807.06 Hong Kong,        Japan
         similar devices                                     USA, Italy,
                                                             Singapore
851410   Resistance heated furnaces & ovens            91.11 Germany,          Japan,
                                                             Norway, UAE       France, USA
851420   Induction/dielectric furnaces & ovens        378.35 Libya, UAE,       Germany
                                                             Iran,
                                                             Bangladesh, Sri
                                                             Lanka
851430   Other furnaces and ovens                     870.62 UAE, Saudi        Germany,
                                                             Arabia            USA, UK,
                                                                               China
851490   Parts of articles of industrial or           577.53 Bangladesh,       USA,
         laboratory electric (including induction            UAE, USA, UK,     Germany,
         or dielectric) furnaces and ovens; other            Sri Lanka         UK,
         industrial or labortatory induction or                                Switzerland
         dielectric heating equipment
854140   Photosensitive semi-conductor devices,     33239.71 Hong Kong,        Australia,
         including photovoltaic cells whether or             Germany, USA,     USA
         not assembled in modules or made up                 Netherlands,
         into panels; light emitting diodes                  Spain
854389   Other nes                                   2762.48 USA, Japan,       Israel, USA,
                                                             Israel            Japan
890710   Invlatable Rafts                              40.96 UAE               Switzerland,
                                                                               Singapore
890790   Other floating structures                     24.35 Singapore, Sri    Singapore,
                                                             Lanka, UAE        USA
901540   Photogrmtrcl Survying Instrmnts &                   UAE               USA
         Applncs
901580   Othe instruments and appliances.             794.42 USA, South        USA, France
                                                             Africa
901590   Parts & Accessores of Surveying,            1142.41 USA               USA, France
         Phtogrmcl, Hydrogrphic Instrumnts etc.
         excl. Compasses



                                     66
902229   Apprts Bsd On Use of Alpha,Bta/Gma          199.58 USA                USA,
         Radtns for other Uses incl Rdogrphy &                                 Germany,
         Rdothrpy Apprts                                                       Israel, Japan
902290   Other, including parts and accessories    12608.93 USA, Japan         USA,
                                                                               Germany,
                                                                               France
902511   Liquid-filled, for direct reading           273.56 USA, Iraq          UK,
                                                                               Belgium,
                                                                               China
902519   Other ( hydrometers and similar loating     134.02 USA, Iraq, UAE     Germany,
         instruments)                                                          USA, Japan
902580   Other instruments                             44.4 China, Yemen,      USA,
                                                            Iraq               Germany,
                                                                               UK,
                                                                               Singapore
902590   Parts & Accssrs of Instruments of Hdg       209.51 Italy, Malaysia,   Belgium,
         9025                                               UAE, Singapore     Korea
                                                                               Republic
                                                                               (South), UK,
                                                                               Germany,
                                                                               USA
902610   For measuring or checking the flow or      2674.17 South Africa,      USA,
         level of liquids                                   Singapore, USA,    Germany
                                                            Switzerland
902620   For measuring or checking pressure         1211.68 USA, Iraq,         Germany,
                                                            Mexico             Japan,
                                                                               Singapore,
                                                                               USA
902680   Other instruments or apparatus              208.93 USA, Mexico        USA,
                                                                               Germany
902690   Parts&Accssrs of Insrmnts/Apprts of         712.36 Switzerland,       Singapore,
         Hdg9026                                            UK, Syria,         USA
                                                            Bangladesh
902710   Gas or smoke analysis apparatus             643.21 UK, Sri Lanka,     USA, UK,
                                                            Oman, Saudi        Germany,
                                                            Arabia, Ethiopia   Japan
902720   Chromatographs & Electrophoresis             24.13 USA, Israel        Japan, USA,
         Instrmnt                                                              Singapore,
                                                                               Germany
902730   Spectrometers, spectro-photometers and      118.69 Germany, UK,       Switzerland,
         spectographs using optical radiations              Switzerland,       USA, UK,
         (UV, visible, IR)                                  UAE                Germany,
                                                                               Japan
902740   Exposure Meters                                     South Africa      Japan




                                       67
902750     Other instruments and apparatus using      178.77 Netherlands,     USA,
           optical radiations (UV, visible, IR)              China, France,   Germany,
                                                             USA, UK          Japan
902780     Other instruments and apparatus            523.94 Romania, USA,    USA,
                                                             Turkey           Germany
902790     Microtomes; parts and accessories          315.46 Yemen,           USA,
                                                             Germany          Germany,
                                                                              UK,
                                                                              Switzerland,
                                                                              Japan
902810     Gas Meters                                 567.35 Egypt            China
902820     Liquid Meters                               23.46 Singapore,       USA
                                                             Dominican
                                                             Republic
902830     Electricity Meters                        2171.73 UK, Australia    China,
                                                                              Switzerland
902890     Parts and Accessories of Gas Lqd or           185 Myanmar          China
           Electricty Supply or Production Meters            (Burma),
                                                             Australia,
                                                             Malaysia
90301000   Instrument and Apparatus for Measuring     544.85 USA              USA,
           or Detecting Ionising Radiation                                    Germany,
                                                                              UK, France
903020     Cathode-ray oscilloscopes and cathode-      27.95 Singapore,       USA, China,
           ray oscillographs                                 Nepal            Singapore
903031     Multimeters                                127.82 USA              USA, China,
                                                                              Taiwan
                                                                              (Taipei)
903039     Other ( oscilloscopes and other           5681.63 UK, USA          USA
           instruments for measuring or checking
           electrical quantities excluding meters)
903083     Other with a recording device, nes          26.97 Sri Lanka,       UK,
                                                             Thailand and     Singapore
                                                             Tobago
903089     Other ( oscilloscopes and other            107.46 USA              USA,
           instruments for measuring or checking                              Singapore
           electrical quantities excluding meters)
903090     Parts and accessories                     1340.63 USA              USA
903110     Machines for Balancing Mechanical          157.59 UAE, Thailand,   UK,
           Parts                                             Singapore,       Germany
                                                             Turkey, Sweden
903120     Test Benches                               165.23 Italy, Brazil,   Germany
                                                             Singapore
903130     Profile Projectors                          17.27 South Africa,    Germany,
                                                             Italy            UK, France,
                                                                              Singapore


                                       68
  903180     Other Msrng & Checking Instrmnts,          615.76 USA, UAE,         USA,
             Applncs & Mchns                                   Singapore,        Germany,
                                                               Germany,          France, UK,
                                                               France            Japan
  903190     Parts and Accessories of Instrmnts of      749.43 USA               Korea
             9031                                                                Republic
                                                                                 (South),
                                                                                 USA, UK,
                                                                                 Germany,
                                                                                 Japan
  903210     Thermostats                                277.75 UK, Thailand      UK, Korea
                                                                                 Republic
                                                                                 (South),
                                                                                 USA, Italy,
                                                                                 Japan
  903220     Manostats                                    0.11 USA               USA,
                                                                                 Switzerland,
                                                                                 Germany,
                                                                                 Denmark
  903281     Hydraulic/Pneumatic Instrumnts &           344.05 USA, Japan        USA,
             Apparatus                                                           Germany,
                                                                                 Japan, UK
  903289     Other ( automatic regulating or           2710.31 USA, Singapore,   Korea
             controlling instruments)                          Niger, Japan,     Republic
                                                               Qatar             (South),
                                                                                 USA,
                                                                                 Germany,
                                                                                 Japan
  903290     Parts and Accessories of Instrmnts of      559.56 Sweden, USA       USA,
             9032                                                                Singapore,
                                                                                 Japan,
                                                                                 Germany
   9033      Parts and accessories (not specified or   9971.28 USA, Japan,       USA,
             included elsewhere in this Chapter) for           Germany           Germany,
             machines, appliances, instruments or                                Japan
             apparatus of Chapter 90

Data Extracted from ITC
Based on 2003 data




                                         69
Annex 3. India's Import of Environmental Products and their Growth arranged in
Descending Order

Commodity Commodity Name                                               US $      CAGR
  Code                                                                Million
                                                                      Annual
                                                                      Dec-03
                                                                        val
84743200    Mchns for Mxng Mnrl Substncs with Bitumen                 15.38      2.03
84042000    Condensers for Steam/other Vpr Powr Units                  1.67      0.51
90154000    Photogrmtrcl Survying Instrmnts & Applncs                  0.84      0.43
90313000    Profile Projectors                                         4.83      0.42
 847290     Other                                                      38.9      0.39
90283000    Electricity Meters                                         20.4      0.29
 690919     Other ceramic wares for laboratory etc.                    2.05      0.26
85141000    Resistance heated furnaces & ovens                         0.56      0.25
 902290     Other, including parts and accessories                     42.3      0.23
90301000    Instrument and Apparatus for Measuring or Detecting        2.12      0.22
            Ionising Radiation
 701790     Other laboratory, hygienic/pharmaceutical glassware        2.27      0.22
 903020     Cathode-ray oscilloscopes and cathode-ray oscillographs    4.38      0.20
90272000    Chromatographs & Electrophoresis Instrmnt                 26.29      0.20
 854389     Other nes                                                 78.01      0.19
 903083     Other with a recording device, nes                         1.94      0.19
 842139     Filtering or purifying machinery and app. for gases,      14.21      0.18
            other
 854140     Photosensitive semi-conductor devices, including           14.3      0.16
            photovoltaic cells whether or not assembled in modules
            or made up into panels; light emitting diodes
90281000    Gas Meters                                                 0.88      0.15
 841919     Instantaneous or storage water heaters, non-electric -     0.83      0.15
            Other
 901580     Othe instruments and appliances.                          20.72      0.15
 903090     Parts and accessories.                                    11.73      0.14
 903289     Other                                                     43.79      0.14
90322000    Manostats                                                  0.37      0.14
 841940     Distilling or rectifying plant                              22       0.14
 690320     Other refractory ceramic goods containing by weight        3.68      0.13
            more than 50 % of alumina (aluminium oxide) or of a
            mixture or compound of alumina and of silica (silicon
            dioxide)
90259000    Parts & Accssrs of Instruments of Hdg 9025                 3.17      0.13
 903089     Other                                                     12.57      0.12




                                        70
690210     Refractory bricks, blocks, tiles and similar goods           15.85    0.12
           containing by weight, singly or together, more than 50%
           of the elements magnesium, calcium or chromium,
           expressed as magnesium oxide, calcium oxide oUNIT
90289000   Parts and Accessories of Gas Lqd or Electricty Supply         7.19    0.12
           or Production Meters
902511     Liquid-filled, for direct reading                             0.57    0.12
902730     Spectrometers, spectro-photometers and spectographs           27.6    0.12
           using optical radiations (UV, visible, IR)
85023100   Other generating sets; wind powered                           1.32    0.11
90319000   Parts and Accessories of Instrmnts of 9031                   32.07    0.10
85051900   Permanent magnets & articles intended to become               4.04    0.10
           permanent magnets after magnetisation; of other
           material
841480     Other                                                        39.87    0.08
 9033      Parts and accessories (not specified or included             79.92    0.08
           elsewhere in this Chapter) for machines, appliances,
           instruments or apparatus of Chapter 90
90318000   Other Msrng & Checking Instrmnts, Applncs & Mchns            102.15   0.07
 841370    Other centrifugal pumps                                       15.63   0.07
 902780    Other instruments and apparatus                               60.55   0.07
70172000   Laboratory hygienic/pharmaceutical glassware of other          0.45   0.07
           glass having a linear coeffcient of expansion not
           exceeding 5X10 -6/ Kelvin within a temperature
           between 0 degree C to 300 degree C
902790     Microtomes; parts and accessories                            30.15    0.07
902580     Other instruments                                             2.62    0.06
902620     For measuring or checking pressure                           11.82    0.06
591190     Other                                                         9.11    0.06
840991     Suitable for use solely or principally with spark-ignition   37.97    0.06
           internal combustion piston engines
84178000   Other Furnaces & Ovens                                        5.48    0.05
 902750    Other instruments and apparatus using optical radiations      4.79    0.05
           (UV, visible, IR)
 903039    Other                                                        13.51    0.04
84219900   Parts, other                                                 33.22    0.04
90303100   Multimeters                                                   1.59    0.04
 841381    Pumps                                                        30.51    0.03
 902610    For measuring or checking the flow or level of liquids       13.95    0.02
90329000   Parts and Accessories of Instrmnts of 9032                   26.25    0.02
 840999    Other                                                          90     0.02
90311000   Machines for Balancing Mechanical Parts                       1.75    0.02
84219100   Parts, of centrifuges, incl. centrifugal dryers               2.77    0.01
 902710    gas or smoke analysis apparatus                              11.13    0.01
90282000   Liquid Meters                                                 0.33    0.01


                                         71
56031400   Man-Made Filmnt Wghng >150G/Sqm                            1.73     0.00
 841360    Other rotary positive displacement pumps                    3.9     0.00
84212900   Centrifuges, incl. centrifugal dryers, other              12.42     0.00
90321000   Thermostats                                                4.18    -0.01
 902519    Other                                                      1.96    -0.01
90269000   Parts & Accssrs of Insrmnts/Apprts of Hdg9026             14.08    -0.01
 842119    Centrifuges, incl. centrifugal dryers, Other               5.62    -0.02
90222900   Apprts Bsd On Use of Alpha, Bta/Gma Radtns for other        2.8    -0.02
           Usesincl Rdogrphy & Rdothrpy Apprts
842121     Centrifuges, incl. centrifugal dryers, for filtering or    3.64    -0.03
           purifying water
90159000   Parts & Accessores of Surveying, Phtogrmcl,                4.84    -0.03
           Hydrogrphic Instrumnts etc. excl. Compasses
90312000   Test Benches                                                4.57   -0.03
 902680    Other instruments or apparatus.                             9.07   -0.04
 841459    Other                                                      11.02   -0.04
 847989    Other                                                     117.42   -0.05
 690290    Other refractory bricks, blocks, tiles et                  12.14   -0.05
85149000   Parts of articles of industrial or laboratory electric      2.74   -0.05
           (including induction or dielectric) furnaces and ovens;
           other industrial or laboratory induction or dielectric
           heating equipment
84222000   Machinery for Clng/Dryng Botls/other Cntnrs                1.13    -0.05
 847990    Parts                                                     40.35    -0.06
84196000   Machinery for Liquefying Air/other Gases                   3.19    -0.07
90328100   Hydraulic/Pneumatic Instrumnts & Apparatus                 0.64    -0.08
84283300   Other Continuous Action Elevatrs & Conveyrs for            0.99    -0.08
           Goods/Materials, Belt Type
84798200   Mxng, Kneadng, Crushng, Grndng, Screng, Siftng,            7.08    -0.10
           Homogensng, Emulsifyng/Stirrng Mchns
84041000   Auxlry Plnt Usd with Boilrs of 8402/8403                   0.76    -0.10
84109000   Parts of Hydrlic Turbnes incl. Regulators                  2.59    -0.10
84179000   Parts of Non Electric Furnaces Ovens etc                    3.6    -0.10
 690310    Other refractory ceramic goods containing by weight         0.4    -0.11
           more than 50% of graphite or other forms of carbon or
           of a mixture of these products
 690390    Other refractory ceramic goods                             6.25    -0.12
85142000   Induction/dielectric furnaces & ovens                       0.2    -0.12
70171000   Laboratory glasses etc of fused quartz or other fused      0.14    -0.12
 847410    Sorting, screening, separating or washing machines         4.04    -0.13
90274000   Exposure Meters                                            0.02    -0.14
 851430    Other furnaces and ovens                                   2.26    -0.16
 841950    Heat exchange units                                        7.45    -0.16
 846291    Hydraulic presses                                          4.65    -0.20
89079000   Other floating structures                                  0.46    -0.20


                                       72
  843680     Other machinery                                              0.11   -0.22
  841012     Of a power not exceeding 1,000 kW but not exceeding                 -0.23
             10,000 kW
  840510     Produced gas or water gas generators with or without          2     -0.24
             their purifiers acetylene gas generators and similar water
             process gas generators with or without their purifiers
 460120      Mats, matting and screens of vegetable materials             0.03   -0.45
84101100     Hydraulic Turbines & Water Wheels of a Power not                    -1.00
             Exceeding 1000 Kw
  841013     Of a power exceeding 10,000 kW                                      -1.00

Growth calculated on the basis of data extracted from ITC
Top 20 import items are shaded


Annex 4. Export of Environmental Goods from India Arranged According to their
Growth during 1998-2003

Commodity Commodity Name                                      CAGR
   Code
 90281000 Gas Meters                                           1.21
  854140  Photosensitive semi-conductor                        0.76
          devices, including photovoltaic cells
          whether or not assembled in modules
          or made up into panels; light emitting
          diodes
 90159000 Parts & Accessores of Surveying,                     0.76
          Phtogrmcl, Hydrogrphic Instrumnts
          etc. excl. Compasses
 90283000 Electricity Meters                                   0.46
  843680  Other machinery                                      0.42
 90222900 Apprts Bsd On Use of                                 0.42
          Alpha,Bta/Gma Radtns for other Uses
          incl Rdogrphy & Rdothrpy Apprts
 89071000 Invlatable Rafts                                     0.41
 90328100 Hydraulic/Pneumatic Instrumnts &                     0.39
          Apparatus
  690320  Other refractory ceramic goods                       0.38
          containing by weight more than 50 %
          of alumina (aluminium oxide) or of a
          mixture or compound of alumina and
          of silica (silicon dioxide)
 84109000 Parts of Hydrlic Turbnes incl.                       0.37
          Regulators




                                           73
 9033      Parts and accessories (not specified or   0.37
           included elsewhere in this Chapter)
           for machines, appliances, instruments
           or apparatus of Chapter 90
 901580    Othe instruments and appliances           0.37
 841480    Other air vacuum pumps                    0.37
90321000   Thermostats                               0.36
 902290    Other, including parts and accessories    0.35
 903083    Other with a recording device, nes        0.35
90319000   Parts and Accessories of Instrmnts of     0.35
           9031
 854389    Other nes                                 0.34
 902620    For measuring or checking pressure        0.33
 903089    Other                                     0.33
56031400   Man-Made Filmnt Wghng                     0.30
           >150G/Sqm
70171000   Laboratory glasses etc of fused quartz    0.28
           or other fused
902610     For measuring or checking the flow        0.27
           or level of liquids
 847290    Other                                     0.27
90301000   Instrument and Apparatus for              0.27
           Measuring or Detecting Ionising
           Radiation
90313000   Profile Projectors                        0.26
84219900   Parts, other                              0.24
 841919    Instantaneous or storage water            0.23
           heaters, non-electric - Other
84178000   Other Furnaces & Ovens                    0.22
 847990    Parts                                     0.22
 841012    Of a power not exceeding 1,000 kW         0.22
           but not exceeding 10,000 kW
90269000   Parts & Accssrs of Insrmnts/Apprts of     0.22
           Hdg9026
84743200   Mchns for Mxng Mnrl Substncs with         0.22
           Bitumen
84798200   Mxng, Kneadng, Crushng, Grndng,           0.21
           Screng, Siftng, Homogensng,
           Emulsifyng/Stirrng Mchns
690390     Other refractory ceramic goods            0.21
690220     Refractory bricks, blocks, tiles and      0.20
           similar goods containing by weight,
           more than 50% of alumina (al2o3), of
           silica (sio2) or of a mixture of
           compound of these products



                                        74
701790     Other laboratory,                        0.18
           hygienic/pharmaceutical glassware
84041000   Auxlry Plnt Usd with Boilrs of           0.18
           8402/8403
89079000   Other floating structures                0.16
 690919    Other ceramic wares for laboratory       0.16
           etc.
902780     Other instruments and apparatus          0.15
841360     Other rotary positive displacement       0.14
           pumps
84196000   Machinery for Liquefying Air/other       0.13
           Gases
903090     Parts and accessories                    0.13
903020     Cathode-ray oscilloscopes and            0.12
           cathode-ray oscillographs
690310     Other refractory ceramic goods           0.12
           containing by weight more than 50%
           of graphite or other forms of carbon
           or of a mixture of these products
85023100   Other generating sets; wind powered      0.11
 841950    Heat exchange units                      0.11
90303100   Multimeters                              0.11
 846291    Hydraulic presses                        0.10
 840510    Produced gas or water gas generators     0.10
           with or without their purifiers
           acetylene gas generators and similar
           water process gas generators with or
           without their purifiers
 902580    Other instruments                        0.10
 903289    Other                                    0.10
 841381    Pumps                                    0.10
85142000   Induction/dielectric furnaces & ovens    0.10
 847989    Other                                    0.09
 902710    gas or smoke analysis apparatus          0.09
 842119    Centrifuges, incl. centrifugal dryers,   0.09
           Other
460120     Mats, matting and screens of             0.09
           vegetable materials
 902680    Other instruments or apparatus           0.09
90312000   Test Benches                             0.08
 841459    Other                                    0.08
 903039    Other                                    0.08
85051900   Permanent magnets & articles             0.06
           intended to become permanent
           magnets after magnetisation; of other



                                       75
           material


841370     Other centrifugal pumps                    0.06
842139     Filtering or purifying machinery and       0.06
           app. for gases, other
84219100   Parts, of centrifuges, incl. centrifugal   0.06
           dryers.
847410     Sorting, screening, separating or          0.06
           washing machines
840999     Other                                      0.05
840991     Suitable for use solely or principally     0.05
           with spark-ignition internal
           combustion piston engines
84101100   Hydraulic Turbines & Water Wheels          0.05
           of a Power not Exceeding 1000 Kw
90282000   Liquid Meters                              0.04
84179000   Parts of Non Electric Furnaces Ovens       0.04
           etc
84222000   Machinery for Clng/Dryng                   0.04
           Botls/other Cntnrs
 902790    Microtomes; parts and accessories.         0.03
 591190    Other                                      0.02
90289000   Parts and Accessories of Gas Lqd or        0.02
           Electricty Supply or Production
           Meters
90329000   Parts and Accessories of Instrmnts of      0.02
           9032
690210     Refractory bricks, blocks, tiles and       0.02
           similar goods containing by weight,
           singly or together, more than 50% of
           the elements magnesium, calcium or
           chromium, expressed as magnesium
           oxide, calcium oxide oUNIT
85141000   Resistance heated furnaces & ovens         0.01
84212900   Centrifuges, incl. centrifugal dryers,     0.01
           other
 902519    Other                                      0.00
90274000   Exposure Meters                            0.00
 851430    Other furnaces and ovens                   -0.01
85149000   Parts of articles of industrial or         -0.02
           laboratory electric (including
           induction or dielectric) furnaces and
           ovens; other industrial or labortatory
           induction or dielectric heating
           equipment


                                         76
90311000     Machines for Balancing Mechanical                   -0.03
             Parts
90318000     Other Msrng & Checking Instrmnts,                   -0.03
             Applncs & Mchns
90259000     Parts & Accssrs of Instruments of                   -0.05
             Hdg 9025
90272000     Chromatographs & Electrophoresis                    -0.05
             Instrmnt
  842121     Centrifuges, incl. centrifugal dryers,              -0.08
             for filtering or purifying water
  902511     Liquid-filled, for direct reading                   -0.08
  902750     Other instruments and apparatus                     -0.09
             using optical radiations (UV, visible,
             IR)
84042000     Condensers for Steam/other Vpr                      -0.14
             Powr Units
  841013     Of a power exceeding 10,000 kW                      -0.16
  902730     Spectrometers, spectro-photometers                  -0.22
             and spectographs using optical
             radiations (UV, visible, IR)
70172000     Laboratory hygienic/pharmaceutical                  -0.26
             glassware of other glass having a
             linear coeffcient of expansion not
             exceeding 5X10 -6/ Kelvin within a
             temperature between 0 degree C to
             300 degree C
 841940      Distilling or rectifying plant                      -0.29
84283300     Other Continuous Action Elevatrs &                  -1.00
             Conveyrs for Goods/Materials, Belt
             Type
90154000     Photogrmtrcl Survying Instrmnts &                   -1.00
             Applncs
90322000     Manostats                                           -1.00

Source: Data extracted from Indiatrades and ranked thereafter
Top 20 export products are shaded

Formula used for growth calculation:
                 CAGR=[Ending Value/Beginning
                                                      (1 No. of years)
                                       Value]                            -1




                                          77
Annex 5. Top 20 Exports of Indian Environmental Goods according to Value in
2002 and RCA of those Products

                                                  World Import in
 Commodity                                                          Revealed Comparative
             Commodity Name                       2002 (in US $
   Code                                                               Advantage Index
                                                     million)
   840999    Other parts suitable for engines       11672.38                0.69
   847990    Parts (machine)                         8849.63                0.89
   841370    Other centrifugal pumps                 3859.31                1.42
             Other machines and mechanical
   847989                                            19179.86               0.26
             appliances
             Photosensitive semi-conductor
             devices, including photovoltaic
   854140    cells whether or not assembled in        5774.1                0.84
             modules or made up into panels;
             light emitting diodes
             Suitable for use solely or
             principally with spark-ignition
   840991                                            14709.09               0.33
             internal combustion piston
             engines
             Other instruments for measuring
   903039    and checking electrical quantities      1333.01                1.32
             excluding meter
             Parts and accessories (not
             specified or included elsewhere in
    9033     this Chapter) for machines,             2054.55                0.82
             appliances, instruments or
             apparatus of Chapter 90
             Other, including parts and
   902290                                            3064.93                0.49
             accessories
   903289    Other                                   8042.91                0.13
   841950    Heat exchange units                     2723.64                0.31
  90283000   Electricity Meters                       746.55                1.03
  84219900   Parts, other                            4013.56                0.17
             Refractory bricks, blocks, tiles
             and similar goods containing by
             weight, more than 50% of alumina
   690220                                             709.33                0.94
             (al2o3), of silica (sio2) or of a
             mixture of compound of these
             products
   690390    Other refractory ceramic goods           360.02                1.80
   847290    Other office machines                   2472.79                0.24




                                         78
               Refractory bricks, blocks, tiles
               and similar goods containing by
               weight, singly or together, more
               than 50% of the elements
   690210                                                     1733.77              0.29
               magnesium, calcium or
               chromium, expressed as
               magnesium oxide, calcium oxide
               oUNIT
               Other laboratory,
   701790      hygienic/pharmaceutical                        748.63               0.67
               glassware
               Centrifuges, incl. centrifugal
   842121      dryers, for filtering or purifying             2335.57              0.20
               water
               For measuring or checking the
   902610                                                     1573.17              0.28
               flow or level of liquids
               Total Export                              5621271.41                1.00


Extracted 2002 data as latest data available in Indiatrades and calculated thereafter



Annex 6. 20 Environmental Goods of India (Experiencing maximum growth rate
during 1998-2003) and their Revealed Comparative Advantage

Commodity          Commodity Name                    US $         CAGR    World Export     Revealed
  Code                                              Million                               Comparative
                                                                                           Advantage
                                                                                             Index
                                                    Annual
                                                    Dec-03
                                                      val
 90281000 Gas Meters                                 1.18          1.21      253.13          0.03
   854140 Photosensitive semi-conductor             68.86          0.76      5774.1          0.84
          devices, including
          photovoltaic cells whether or
          not assembled in modules or
          made up into panels; light
          emitting diodes
 90159000 Parts & Accessores of                      2.37          0.76     1102.29          0.22
          Surveying, Phtogrmcl,
          Hydrogrphic Instrumnts etc.
          excl. Compasses
 90283000 Electricity Meters                          4.5          0.46      746.55          1.03
   843680 Other machinery                            1.17          0.42      745.61          0.02


                                           79
 90222900 Apprts Bsd On Use of Alpha,              0.41          0.42     203.79     0.45
             Bta/Gma Radtns for other
             Usesincl Rdogrphy &
             Rdothrpy Apprts
 89071000 Inflatable Rafts                         0.08          0.41     95.79      0.05
 90328100 Hydraulic/Pneumatic                      0.71          0.39      240       0.51
             Instrumnts & Apparatus
   690320 Other refractory ceramic                 2.04          0.38     531.88     0.19
             goods containing by weight
             more than 50 % of alumina
             (aluminium oxide) or of a
             mixture or compound of
             alumina and of silica (silicon
             dioxide)
 84109000 Parts of Hydrlic Turbnes incl.           1.26          0.37     465.69     0.37
             Regulators
     9033 Parts and accessories (not              20.66          0.37    2054.55     0.82
             specified or included
             elsewhere in this Chapter) for
             machines, appliances,
             instruments or apparatus of
             Chapter 90
   901580 Other instruments and                    1.65          0.37    1455.28     0.12
             appliances
   841480 Other                                    7.51          0.37    5643.86     0.05
 90321000 Thermostats                              0.58          0.36    1708.94     0.03
   902290 Other, including parts and              26.12          0.35    3064.93     0.49
             accessories
   903083 Other with a recording device,           0.06          0.35     689.48     0.01
             nes
 90319000 Parts and Accessories of                 1.55          0.35    2710.57     0.07
             Instrmnts of 9031
   854389 Other nes                                5.72          0.34    8971.97     0.03
   902620 For measuring or checking                2.51          0.33     1738.1     0.09
             pressure
   903089 Other                                    0.22          0.33     1739.05    0.02
             Total Export                                               5621271.41
RCA calculated on the basis of data extracted from Indiatrades




                                           80
Annex 7. Items which have more than one use (dual use or multiple use)

HS Code    Commodity

   56031 Man-Made Filament Weighing >150g/Sqm

  392690 Other articles of plastics

  460120 Mats Matting & Screens of Vegetable Materials

  560314 Man-Made Filament Waging >150g/Sqm

  591190 Other Textile Products & Articles for Technical Use

  690210 Goods Contng by Wtsingly/ together>50% of the Elements
         Magnesium\calcium/Chromium
  690220 Refractory Bricks Blocks Etc containing weight.>50% Alumina, Silica/F
         Mixture
  690310 Other Refractory Ceramic Goods Containing by weight>50%
         Graphite/Other Forms of Carbon/Of a Mixtures of these
  690320 Goods Contng by Wt>50% Alumina (Aluminum Oxide)/Of
         Mxtr/Compoun D of Alumina of Silica (Silicon Di-Oxide)
  690390 Other Refractory Ceramic Goods

  690919 Othr Cermc Wares Fr Labrtry Etc

  701710 Lab Glasses Etc of Fused Quartz or Other Fused

  701790 Other Lbrtry/Hygnc/Hrmctcl Glassware

  840410 Auxiliary Plant Used With Boilers of 8402/8403

  840420 Condensers Vapor Power Units for Steam/Other

  840510 Producer Water Gas Gnrtrs, Acetle




                                        81
841360 Other Rotary Positive Displace Mint Pumps

841370 Others Centrifugal Pumps

841410 Vacuum Pumps

841459 Other Fans

841480 Other Pumps, Compressors Etc

841940 Distilling/Rectifying Plant

841950 Heat Exchange Unit

841960 Machinery for Liquefying Air/Other Gases

842119 Other centrifuges including centrifugal Dryers

842121 Filtering Purifying Machinery Apparatus for Water

842129 Other Purifying Machinery Apparatus Fr Liquid

842220 Machinery Fr Clng/Dryng Botls/Othr Cntnrs

842833 Other Continuous Action Elevators & Conveyor for Goods/Materials
       Belt Type
843680 Other Machinery of Hd8436

846291 Hydraulic Presses

847290 Other Office Machines

847410 Srtng, Screning, Separating &Washing Machines

847982 Mixing, Kneading, Crushing, Grinding, Screen, Sifting etc




                                      82
847989 Other Machine & Mechanical Appliances of Hag 8479

851410 Resistance Heated Furnaces & Ovens

851420 Induction/Dielectric Furnaces & Ovens

901540 Photogrmtrcl Surveying Instruments & Appliances

901590 Parts Accessories of Surveying, Phtogrmcl, Hyd-Rogrphic Instruments
       Etc. Excluding compasses
902229 Apparatus based On Use Alpha, Bta/Gma radiations for other Uses Incl
       Rdogrphy & Rdothrpy apparatus
902290 Other Apprts Incl Prs & Accssrs of Hdg 9022

902511 Thermometers, Liquid filled, For Direct Riding

902580 Other Instruments of Heading 9025

902590 Parts Accssrs of Instruments of Hdg 9025

902610 Instruments Apparatus for Measuring or Checking the Flow or Level of
       Liquids
902620 Instruments Aprts Fr Msrng/Chkng Pressure

902680 Other Instruments Apparatus Hdg9026

902690 Prts & Accssrs of Insrmnts/Apprts of Hdg9026

902710 Gas or Smoke Analysis Apparatus

902720 Chromatographs Electrophoresis Instrument

902730 Spectrometers, Spectrophotometer Meters Spectrographs Using Optical
       Radiation
902780 Other Instruments Apparatus of Hdg 9027




                                     83
  902790 Micro tomes; Parts Accessory of Hdg 9027

  902810 Gas Meters

  902820 Liquid Meters

  902830 Electricity Meters

  902890 Parts and Accessories of Gas Liquid or electricity Supply or Production
         Meters
  903010 Instrument and Apparatus for Measuring or Detecting

  903020 Cathode Ray osclcps Cathode-Ray Osclogrphs

  903031 Multimeters 903039 Other Instrument Apparatus Fr Msrng/Chkngvltge,
         Curnt,Rsstnc/Pwr, Without Rcrdng Devc
  903083 Instruments Parts with Recording Device

  903089 Other Instruments Apparatus

  903090 Parts and Accessories of

  903210 Thermostats

  903220 Manostats




Annex 8. Items which can be of interest for India

a) Based on HS Codes
HS                  Booms and socks of corn cobs
230210
HS                  Trash compactors
847989
HS                  Bio-film medium
393269
HS                  Rotating Biological contractor
392690


                                         84
HS                    Ozone Production System
854389
HS                    Photosensitive semiconductor devices including photo volatile
854140                Cells assembled in module\made up into panels

b) Environment Friendly products in the context of production capabilities of India:
Jute and jute
products
Coir and coir
products

Bamboo and rattan products

Cotton handlooms

Handloom furnishing materials

Textiles and clothing made by using natural dyes

Garments using natural dyes

Non timber forest products
Products based on
TK




                                          85

				
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