FACILITATING FOREIGN DIRECT INVESTMENTS IN INDIAN BUSINESS AND INDUSTRY
FACILITATING FOREIGN DIRECT INVESTMENTS IN INDIAN BUSINESS AND INDUSTRY
The Indian garbage will offer a business opportunity of 14 billion US-Dollar by 2025 for the waste treatment industry. The growing economies across the globe are observing an increase in urban population, rise in per capita income level and increasing consumption level. “With India growing on similar grounds, increase in purchasing power has led to more affordability and accessibility of the resources that increased the levels of municipal as well as industrial wastes across the Indian states.” In the country, close to 62 million tons of waste is generated on an annual basis which will increase by two times by 2030. The increase in municipal solid waste (MSW) and industrial waste has led to a rise in public health concerns and environmental impacts due to the production of greenhouse gases. Of the total generated municipal solid waste, close to 45 percent is actually treated. More than 50 percent of the total solid waste generated remains untreated and dumped on the landfills due to the lack of efficient waste management system in India. As municipal solid waste (MSW) holds close to 75 percent of the total waste generated in India, there lies an investment opportunity for the private players to convert a pile of garbage into the income streams.
Business opportunities
■ In 2017, the Indian company NTPC invited national and international players to set up about 100 waste-to-energy pollution free plants across the country, one could read in “The Economic Times”.
■ India has the potential to generate approximately three gigawatts (GW) of electricity from waste by 2050.
■ The government allows 100 percent FDI (foreign direct investment) under the automatic route for urban infrastructure areas including waste management subject to relevant rules and regulations.
■ The central government has been implementing Swachh Bharat Abhiyan (a nation-wide campaign in India for the period 2014 to 2019 that aims to clean up the streets, roads and infrastructure of India’s cities, towns, and rural areas), emphasizing waste management at different stages of generation, collection and disposal.
■ Municipal solid waste management sector in India is projected to see capital and O&M (operation & maintenance) requirement of close to 65 billion US-Dollar by 2030.
■ India has the potential to generate approximately 90 million tons/year of waste by 2030-2032.
■ High population growth and changing lifestyles would increase the waste volumes in India.
Wastewater Recycling: A Multi-Billion Dollar Opportunity For India
The water market is projected to reach USD 14 billion within five years, while annual spending in the industrial sector is estimated to approach USD 2 billion. The wastewater treatment sector is expected to grow faster than water treatment, due to the central and state government’s renewed drive in mitigating and eliminating the pollution in India‘s rivers, exhibiting a CAGR of 15.3% to reach USD 6.78 billion in 2020, up from USD 3.3 billion in 2015. Spending on water supply will grow from USD 5.56 billion to USD 9.4 billion over the next five years.
India is the biggest consumer of freshwater in the world today, accounting for about 750 billion cubic metres annually, according to the World Bank. The World Bank has studied India’s rising water requirements extensively. But for a country which accounts for only 4 per cent of the world’s water resources despite hosting 17 per cent of the world’s population, the water crisis is a looming danger we should be wary of. The Central Pollution Control Board (CPCB) estimates that by 2030, India’s water demand is expected to rise to 1.5 trillion cubic metres. How can India bridge the divide between water haves and have nots? Lack of proper infrastructure and awareness with regard to wastewater recycling in India has resulted in over exploitation of India’s water resources and there are barely existent mechanisms on wastewater recycling.
Why Isn’t Wastewater Recycled in India?
In India, the awareness related to over exploitation of water resources has been very low. India has always been projected as a country with abundant water resources which is no longer the case. On the other hand, per capita availability of water in India has dwindled from 1,800 cubic metres per year in 2001 to an estimated 1,100 in 2050. Water used for sanitation purposes is rarely recycled in India’s urban areas. Wastewater recycling infrastructure in India’s urban spaces is neither properly financed nor designed, resulting in limited options for people to recycle wastewater.
Only 30 per cent of India’s wastewater is recycled. The apathy with regard to treatment of wastewater in India is visible from how its sewage systems have been designed. Most of urban India’s sewage systems lead directly to rivers or lakes. For example, in Delhi, 90 per cent of urban households have sewage systems which dump the wastewater directly into the Yamuna. Years of this practice has resulted in the Yamuna becoming one of the world’s most polluted rivers.
The concept of wastewater recycling in India was not much discussed about till the early 90s. The design of most Indian urban drainage systems is such that wastewater flows directly into a river or lake without treatment. Water is also mistakenly thought to be an endless natural resource, which is why its conservation or recycling was not been a part of our culture.
Challenges In Wastewater Recycling In India
The biggest challenge India faces is the cost of setting up of wastewater treatment plants and restructuring of sewerage systems. The Centre for Science and Environment estimates that Rs. 1 crore per million litres is the cost incurred to build a wastewater plant. Without adequate support from the government and private sector, urban and rural India will not be able to afford the building of such plants and would rather opt to discharge wastewater directly into water bodies.
The unavailability of land also acts as a common hindrance in the building of wastewater plants in India, especially in urban areas. Land is a highly expensive commodity in India, especially in urban India. Setting up a wastewater treatment plant requires land, acquiring which is difficult. Other challenges like continuous power supply, skilled labour force, adhering to environmental guidelines are consistent features in setting up of wastewater treatment plants.
Wastewater recycling is a huge challenge in India as we have been at least two decades late in thinking about it. Nearly 70 per cent of India’s wastewater goes directly into rivers and lakes. Instead of traditional setting up of wastewater plants, what we should now look at alternative methods of wastewater recycling which doesn’t burden the economy.
The Changing Scenario
Though low compared to global standards, India has been investing in wastewater treatment since 2004. With increase in both rural and urban sanitation coverage under the Swachh Bharat Abhiyan since 2014, a number of private corporations are taking increased interest in the sector of sanitation and wastewater recycling. The World Bank estimates that India’s total water and sanitation sector is worth $420 million, with an annual growth rate of 18 per cent. Investments in this sector by private corporations could see the growth of small organisations associating themselves with wastewater collection, redirecting of wastewater to treatment plants and transportation of wastewater from remote locations to treatment plants. Doing so would strengthen both the entrepreneurial outlook in rural and urban India, as well as address the issue of wastewater management.
The Swachh Bharat Abhiyan has played a crucial role in addressing the issue of wastewater treatment. The mission has laid stress on the development of indigenous technologies and has roped in experts from Gujarat Technological University and Bhabha Atomic Research Centre (BARC) to conduct research on how low cost technologies to treat wastewater can be developed. The mission has also stressed on Radiation Hygienisation, a process in which wastewater from households is hygienised using gamma radiation and the water is made fit for industrial or household usage other than consumption.
The Swachh Bharat mission has also focused on the issue of wastewater and steps are being taken to improve the quality and quantity of water recycled. The number of toilets being built will increase the amount of wastewater generated. A proper mechanism, if in place, can ensure that we are well-equipped to deal with the problem of wastewater.
A number of organisations like Xylem India, Jaldhara Technologies, Wabag etc. have been engaged in providing sustainable solutions for wastewater treatment. Wabag has been instrumental in building the first plant for recycling of wastewater to drinking water in Namibia and plans to replicate the same in India as well. A full scale implementation of such models in India will reduce the over usage of India’s water resources for drinking purposes.
India has been picked as one of the top four markets in global water treatment with Brazil, China and United States, by Global Water Intelligence in Global Water Market 2014. The country is experiencing rapid industrialization, population growth and economic growth, and to sustain this demands more reliable supplies of municipal and industrial water. Municipal and industrial wastewater treatment and reuse will be the most exciting area for future growth. Waste water management has been given a high priority in the 2012 National Water Policy, which also supports water reuse for beneficial purposes. International companies are expected to enter the market to tap into these opportunities.
India is one of the biggest markets in size and growth rate, but among the top markets, the volume of India’s capital expenditure is the lowest, which suggests that India has the biggest potential to grow further.
Even though the Water Market in India shows a lot of potential, there are many challenges restricting its growth. For example, the water and wastewater infrastructure is inadequate, of poor quality and in need of reform. Eighteen percent of the world’s population live in India, with only 4% of the total usable water resources (Ministry of Water Resources). Official data show that the annual per capita availability of water has already been decreased in the past 10 years (from 1,816 cubic meter in the year 2001 to 1,545 cubic meter in 2011). At the same time, a large populace has never had access to safe water. The planning commission has budgeted USD 26.5 Billion in the 2012-2017 plan to provide safe water to all urban and rural Indians. Treatment of waste water, sewage treatment and solid, liquid and chemical waste, water technology, environmental services, desalination companies, consulting and engineering are some services that India will require to tackle the water problem.
Maharashtra is emerging as a hub for the water sector. Over 12 international companies have already set up design and engineering centers in Mumbai and Pune. Currently there are more than 1200 companies dealing in water and wastewater treatment in Maharashtra, they mainly cater to the small & medium sector. Pune and Nashik are going to be the largest hub for manufacturing & fabrication industry in pumps, instrumentation & monitoring equipment. A centralized wastewater treatment & recycling plant is under planning stage for the cities of Mumbai and Pune.
Demand management, quality of service provision, and water reuse are some of the areas where improvement is required. So private sector involvement is expected to play a crucial role in improving the state of water and sanitation service provision. Traditionally, the Water & Waste-Water Sector in India has been owned and operated by the government. But the Indian government supports the private sector to contribute and initiate various regulatory reforms. Not being able to solve all the problems single-handedly, the government is encouraging the private sector to participate and introduce regulatory reforms. It is encouraging public-private partnerships (PPPs) at a range of levels and by various means however, institutional weakness remains a restrictive factor slowing the pace of PPPs in the country.
The water market is projected to reach USD 14 billion within five years, while annual spending in the industrial sector is estimated to approach USD 2 billion. The wastewater treatment sector is expected to grow faster than water treatment, due to the central and state government’s renewed drive in mitigating and eliminating the pollution in India‘s rivers, exhibiting a CAGR of 15.3% to reach USD 6.78 billion in 2020, up from USD 3.3 billion in 2015. Spending on water supply will grow from USD 5.56 billion to USD 9.4 billion over the next five years.
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