Chemical exports to face EU acid test

HELSINKI: The Indian chemicals industry may find it difficult to export their products to European countries after November 2010. The European commission (EC) has recently passed a new legislation, ���Reach���, making it mandatory for companies to produce animal safety data and risk management data and also to register with EC to be able to sell their products in the countries.

Indian chemical exporters will now have to make significant investments to comply with the new global norm. ���Becoming Reach-compliant is very costly and a time consuming exercise for a company,��� an Indian industry official said. The cost of conducting tests and completing paper work for Reach could cost anywhere between $50,000 to $2,00,000. A number of Indian companies are of the view that business in the European market may not be worth this investment, an official with a chemical industry association said.

The new norm comes in the backdrop of India and the EU (European Union) locking horns over the seizure of some Indian drug consignments in ports of EU over allegations of counterfeits.

The EC, on the other hand, argues that the latest legislation is an attempt to ensure safety of environment and human beings through chemical safety analysis. ���The credibility of the chemical industry rests upon this new legislation and they need to ensure that they produce chemicals that are safe for environment and people. The new law aims to ensure safety of people and places of production in the complete supply chain,��� EC environment commissioner Stavros Dimas said.

Chemical companies have a year to register substances under Europe���s new Reach legislation. The registration process, involving cumbersome paperwork, could make it a rough ride for Indian companies that are planning to double chemical production by 2015, an industry analyst said.

���It may have some impact on trade but the idea behind the legislation is to leave the risk management system in the hands of the industry and to start with a flow of information that would correspond with the supply chain,��� European Chemicals Agency director Andreas Herdina said.