Chemical Safety Rules: Raising the bar to REACH in India
As India nears its goal of REACH-like regulation, companies across the globe will need to adapt to these new chemical safety rules.
India’s Chemical Safety Rules will align the country with other regions’ chemical regulations. (Not to mention will strengthen its position in the global marketplace.) However, reducing hazards means new hoops for companies to jump through. After almost a decade, 5 drafts, and several delays, it seems that the day has nearly come for the country’s expanded, REACH-like regulations. Before it does, make sure you’re ready for these upcoming requirements – and what they mean for multi-national corporations across the value chain.
The catalyst behind India’s new Chemical Safety Rules
As innovations in the chemical industry open new opportunities in the market, they also bring new obstacles to protecting our world. Updating requirements in line with changing needs is critical to safeguarding the health of individuals and the environment. This is especially the case in India’s rapidly evolving and growing marketplace. According to the India Brand Equity Foundation (IBEF), India ranks as the 6th largest producer of chemicals globally. And it only continues to grow.
The IBEF explains that in 2019, the Indian chemical industry accounted for USD 178 billion. And by 2025, it’s expected to almost double – reaching USD 304 billion. Yet this country’s unhurried chemical regulatory developments haven’t matched the market’s fast growth pace. Enter the proposed Chemicals (Management & Safety) Rules. More simply, the Chemical Safety Rules.
In a long overdue effort to update its chemical laws (and after a long history of revisions since 2014), India issued the fifth draft of its Chemical Safety Rules in 2020. While still in the proposal stage, these rules will bridge the gap between India’s limited chemical regulations and the more inclusive ones of other regions, namely Europe.
The changes to come: REACHing new Chemical Safety Rules
There’s a theme among India’s many forthcoming EHS regulatory developments. Like its overhaul of labor legislation for a safer workplace and of environmental law for a safer world, the country also wants to revamp its regulations to reduce chemical risks. The plan is to do so through regulation with a broader “reach.” Or REACH, to be exact: Across Registration, Evaluation, Authorisation, and Restriction of chemicals.
Today, India’s current regulations around chemical substances don’t have the same wide-scope control as REACH but instead focus on the user level. To be on par with this European regulatory framework, India will expand its chemical safety to include requirements starting at the point of origin. This will mean implementing new regulations for these earlier stages as well as establishing authorities who will impart control over them.
Prepare for new obligations – and new authorities
The proposed Chemical Safety Rules will require companies to establish inventory – as well as mandate both manufacturers and importers to provide their chemicals’ health and safety information to authorities. Such new regulations will include requirements around notification, registration, restriction, prohibition, packaging, and labeling. This goes for substances and mixtures (including their intermediates) manufactured, imported, placed, or intended to be placed on the market in the Indian Territory.
Additionally, companies will need to notify the Chemical Regulatory Division of all existing substances manufactured or imported in quantities more than 1 Tonne Per Annum (TPA). This should be done within the initial 6-month notification period, starting 1 year from the date of the rules’ adoption. (A date still to be confirmed.) For any new substances introduced after the initial period, companies must complete the notification process at least 90 days prior to placing them in the Indian Territory. Companies must also update information of notified substances (e.g., the total quantity placed) by 31 January every year.
Alongside new notification requirements come those for labeling. To match with REACH regulations, the Chemical Safety Rules will implement labeling requirements according to the 8th revision of GHS guidelines. These include additional stipulations for packaging, chemical safety, and accident preparedness as well as requirements for use of non-notified substances.
On top of these obligations, the rules will also establish several authorities to control the production and sale of chemicals. One such agency is the Indian National Chemical Authority (INCA) – equivalent to the European Chemicals Agency (ECHA). Additionally, the country plans to implement scientific, risk assessment, and chemical regulatory committees as well as special units to oversee and implement the provisions under the rules.
Get ready for a legally required (and lengthy) registration process
According to the new rules, manufacturers and importers that place in Indian Territory any Schedule II priority substances (or their intermediates) in quantities of more than 1 TPA will need to register them. By when? Within 1.5 years of their inclusion on the list.
And that registration will take some time. Businesses will need to submit a technical dossier containing every aspect and study of that chemical, a chemical safety report, as well as a chemical exposure scenario like EU REACH. Once the dossier is submitted, it must go through the detailed evaluation and assessment process carried out by the Scientific Committee and Risk Assessment Committee.
India will also establish a new mechanism to assess, identify, and designate registered substances. Through it, regulators will formulate criteria to prohibit or restrict priority hazardous substances based on their level of risk to human and environmental safety. Use of restricted substances would require authorization and would be subject to additional safety requirements.
Also important to note: If you’re a foreign manufacturer dealing in the Indian marketplace, you’ll need to appoint an India-based Authorised Representative (AR) for this process. Just as Only Representatives in the REACH framework, ARs are non-Indian companies’ key to collaboration with Indian businesses and consumers. Your company may only register via the Chemical Safety Rules’ procedures if you’ve appointed one.
The consequences for businesses: Fines and future impact
One of the new Chemical Safety Rules’ biggest consequences for companies is the cost of non-compliance. Whether operating or placing your products on the market in India, be aware that any non-compliance with these update chemical regulations can result in hefty fines of up to USD 680 – per day. (Depending on the quantity of the substance you’ve placed on the market and the length of time you’ve been non-compliant.)
However, there’s an even bigger change at play for corporations operating or selling in India. Aligning its chemical management laws with global standards better positions India in the global value chain. More compatibility with the needs of more markets means more comparative advantage. In the short-term, Indian chemical companies could tap into opportunities opened by current trade conflicts. Looking at the longer-term, these new Chemical Safety Rules increase sustainability and secure shareholder value for corporations meeting them. Regardless of how we’ll see this broader influence pan out, it’s clear that the changing chemical regulation in India will shift our business landscape around the world.
Readying your business for the wide REACH of Chemical Safety Rules
Despite the impact we foresee from India’s forthcoming Chemical Safety Rules, the nuts-and-bolts of these new regulations are still foggy. Many procedural and practical questions remain unanswered. Will there be any IT tools or guidelines in place to help you comply? (Especially in the rigorous and lengthy registration process?) How can you submit registration applications jointly? And of course: When will these rules actually come into effect?
With eyes set on their anticipated adoption in late 2021/early 2022, you can already prepare your business. Compare these new requirements with your current process, mapping out where your operations are misaligned. Make note of critical registration and notification deadlines and where they fall in your supply chain timeline. Plus, get a head start on your chemical technical dossiers to be ready for the upcoming registration process. Above all, stay tuned for updates on these and more major regulatory changes across the world to keep your company ahead of what’s to come.