Introduction: BIS standards chemicals India
India’s chemical industry is one of the most important building blocks of the country’s manufacturing economy. It is the source of key raw materials to industries such as pharmaceuticals, agriculture, textiles, plastics, construction and consumer goods. Today the sector produces over 80,000 commercial chemical products, making it one of the most diverse industrial ecosystems in the world.
Recently, Government of India came with an important policy shift that would expectedly transform the chemical market. The Department of Chemicals and Petrochemicals has initiated the mandatory certification by Bureau of Indian Standards (BIS) of a large number of chemical and petrochemical products.
Earlier, many of the BIS standards were voluntary and that allowed sub-standard import of chemicals to enter Indian market. These products at times contained impurities which could affect the industrial processes and human health and environment’s safety. To counter the fears, the government had enacted Quality Control Orders (QCOs) under the BIS Act 2016, making certification mandatory for a number of chemicals.
This move is not simply a matter of regulation. It is also an opportunity of major scale for domestic manufacturers and MSMEs to replace imports with BIS compliant products.
Read More: Handbook On Chemical Industries (Alcohol Based)
Why Mandatory BIS Standards Were brought in
The decision to render BIS certification mandatory is founded on a number of strategic objectives. The government has an aim of ensuring that the industries that use the chemicals require strict standards of quality and safety.
Important reasons behind the policy are:
- Protection of human health: All chemicals which are used in pharmaceuticals and food processing and agriculture need to contain no toxic impurities.
- Environmental safety: The use of poor quality chemicals results in soil and water body contamination.
- Fair competition: Domestic manufacturers who invest in quality systems should receive protection from competing products which do not meet quality standards.
- Supply chain security: Some chemical intermediates have significant value for both industrial and defence applications.
More than 100 chemical products are currently covered under Quality Control Orders including solvents, intermediates and polymer raw materials.
Phenol: An Industrial Chemical That Is In High Demand
Phenol is among the most important chemicals used in modern manufacturing. The material serves as an essential component which produces multiple products including phenolic resins and laminates and adhesives and engineering plastics and pharmaceutical intermediates.
Demand for phenol in India has experienced rapid growth in the past decade owing to expansion of construction, automobile and electronic industries. With the pace of infrastructure development and the growth in demand from consumers, the demand for high-quality phenol is constantly growing.
Current estimates place the demand for phenol in India at having crossed 600 kilotonnes a year, making India one of the fastest growing markets for chemicals in Asia.
However, domestic production capacity has not kept up with demand and this has resulted in heavy dependence on imports.(BIS standards chemicals India)
Read More: Hydrogen Peroxide (50% Concentrate) – Manufacturing Plant, Detailed Project Report, Profile, Business Plan, Industry Trends, Market Research, Survey, Manufacturing Process, Machinery, Raw Materials, Feasibility Study, Investment Opportunities
Acetone: The Co-Product Driving More Demand
Acetone is obtained together with phenol from the cumene oxidation process. Although it is a co-product, acetone itself is a very valuable chemical.
It is widely used as:
- An industrial solvent
- A raw material for isopropyl alcohol (IPA)
- Feedstocks for methyl methacrylate and plastics
- An ingredient in paints, coatings and adhesives
India’s monthly requirement of acetone is estimated at around 23-25 kilotons and domestic supply is much less. This gap is currently met by imports, principally from Southeast Asia and the Middle East.
Major Phenol Producers of India
India’s phenol production is dominated by two major players who supply major portion of the domestic market.
Deepak Phenolics Limited has a large integrated phenol-acetone complex at Dahej in Gujarat. Since it was commissioned in 2018, the plant has become one of the most relevant phenol facilities in the country and represents an important proportion of the domestic production.
Hindustan Organic Chemicals Limited (HOCL) is a government-owned company which manufactures phenol, acetone and hydrogen peroxide at Kochi manufacturing complex. Although the company has had its share of financial challenges in the past, it is still an important strategic supplier.
Despite these producers, domestic production only meets some 60 percent of India’s demand for phenol, which means the rest has to be met through imports.
Read More: Project Reports & Profiles
Import Dependence and the Effects of BIS Rules
India is currently importing large volumes of phenol and acetone to satisfy the industrial demand. Major exporting countries are Thailand, Singapore and South Korea.
However the introduction of mandatory BIS certification creates a new dynamic in this trade. Foreign manufacturers are now required to get the certification through Foreign Manufacturers Certification Scheme (FMCS) before supplying chemicals to the Indian market.
The process of certification involves:
- Factory inspection and auditing
- Product testing for BIS standards
- Detailed documentation and checks for compliance
Because of these requirements, access by some foreign suppliers to the Indian market may be difficult or costly to maintain. This creates a good opportunity for domestic producers to expand their production potentials.(BIS standards chemicals India)
Hydrogen Peroxide: An Increasing Industrial Need
Hydrogen peroxide is another chemical that has experienced an increasing demand in a range of industries in India. It is widely used as a powerful oxidizing agent for manufacturing processes.
Major applications include:
- Textile bleaching
- Pulp and paper processing
- Water and wastewater treatment is one of the following:
- Chemical synthesis and sterilization
Indian manufacturers like National Peroxide Limited, Gujarat Alkalies and Chemicals Limited and Hindustan Organic Chemicals Limited are in the production of hydrogen peroxide at present. Even with these producers, occasional shortages of supplies occur, particularly when there is heavy industrial demand.
Price fluctuations in recent years have brought the issue of further domestic production capacity to light.
Read More: Top 10 Profitable Chemical Manufacturing Business Ideas in India (Guide for Investors)
Emerging Opportunities for MSMEs
Mandatory BIS standards should reduce the flow of poor quality, imported chemicals. This opens a conducive environment for domestic manufacturing, especially for small and medium enterprises.
MSMEs do not necessarily have to construct lead manufacturing giant petrochemical complexes. Instead, they can target niche segments or down-stream chemical products that require smaller production facilities.
The market presents its most valuable business prospects through these particular business opportunities:
- Manufacturing phenolic resins, industrial adhesives based on phenol
- Production of specialty solvents for use in pharmaceuticals and agrochemicals
- Establishing hydrogen peroxide plants in the vicinity of textile or paper clusters
- Developing polymer additives and special chemical formulations
Industrial customers prefer to work with smaller manufacturers who demonstrate their dedication to producing high-quality products and delivering them according to established standards.
Read More: Top 15 Chemical Manufacturing Business Ideas in India with Huge Import Substitution Potential
Importance of Feasibility and Technical Planning
The chemical manufacturing sector demands technical expertise and precise planning to achieve successful market entry. Entrepreneurs require existing production knowledge together with environmental regulations and market needs assessment before they can begin their project.
A detailed feasibility study helps the investors to know factors like capital requirements, the cost of operating these, the source of raw materials and projected profitability.
Consultancy organizations such as Niir Project Consultancy Services (NPCS) offer techno-economic feasibility reports and market research to help entrepreneurs go through the process of setting up chemical manufacturing units.
Conclusion
There has been a major transformation in the Indian chemical industry with the implementation of the BIS standards on a mandatory basis. The government aims to achieve two objectives through its strict quality standards which will create safer products and reduce environmental hazards while ensuring that market competition remains fair.
At the same time, new opportunities for domestic manufacturers are created by these regulations. Chemicals such as phenol, acetone and hydrogen peroxide already have huge demand-supply gaps, and import restrictions on sub-standard imports could open up these opportunities even further.
The message is clear to entrepreneurs and investors. Companies that invest in BIS compliant manufacturing and modern technology and robust quality control systems will have a great chance of capitalizing on the next phase of growth in India’s chemical sector.(BIS standards chemicals India)
Frequently Asked Questions (FAQs)
What Is BIS Certification in the Chemical Industry?
BIS certification is confirmation of quality, safety and environmental specifications of chemical products as per Bureau of Indian Standards.
Why did India introduce mandatory BIS Standard for chemicals?
The government established mandatory standards to avoid dangerous impurities, to ensure better product quality and lessen imports of chemical goods of substandard quality.
What is the demand for phenol in India?
In India, the demand for phenol has exceeded around 600 kilotons a year thanks to industries like plastics, laminates and engineering materials.
Who are the big producers of phenols in India?
The major producers are Deepak Phenolics Limited and Hindustan Organic Chemicals Limited.
Can MSMEs open chemical manufacturing business?
Yes. MSMEs are able to access the industry via specialty chemicals, downstream derivatives and smaller regional manufacturing units.
