Sustainable energy, water and environment to India

Trends and opportunities

The market

Rapid urbanisation and dwindling fresh water reserves have stimulated a renewed focus on India’s water sector, and the country is looking at ways to address issues of water quality and availability. Multilateral agencies like the World Bank and the Asian Development Bank (ADB) are supporting the federal and state governments to help improve the water situation and drive water sector reforms.

The Indian industrial water and waste water market are going through a shift with recycling and reuse, zero liquid discharge, and online effluent quality monitoring systems becoming mandatory across industries. Recycling and reuse of water has been made mandatory for industries and housing projects in some states. Industries across power, food and beverage, pharmaceuticals, refineries and textiles and other sectors are gearing to meet stringent pollution norms, leading to increased demand for reliable water and wastewater treatment technologies.

The Indian water resources management and wastewater market has great potential over the coming years with significant amounts of Indian Central Government spending for various initiatives.

Opportunities

Many opportunities exist for Australian firms in the water space. A number of major initiatives being undertaken in India include:

  • Ganga River Cleaning Project: US$3.5 billion (jointly funded by the World Bank and the Government of India) project to focus on river restoration, building sewage treatment infrastructure across 118 towns, village level waste water management, and rehabilitation of existing sewage treatment plants (STPs).
  • National Hydrology Project: US$700 Million (jointly funded by the World Bank and the Government of India) project aimed at establishing a hydrologic database and hydrological information system (HIS) for effective water resource planning and management. The project components includes installation of hydromet observation stations, national level water resources information system, flood management and modelling projects and SCADA systems for all the reservoirs and dams.
  • Groundwater Aquifer Mapping and Management Project: US$1 billion projects aimed at data acquisition through 21,000 exploratory and observatory borewells to be excavated, preparation of aquifer maps and real time groundwater monitoring.
  • Smart Cities Initiative: Water is a significant aspect of the smart cities initiative in India. Projects on urban water supply, recycle and reuse of waste water, smart water meters are in pipeline. The ADB has sanctioned US$1 billion for urban water supply projects in India.

Competitive enviroment

The water sector in India is offering significant opportunities for foreign players. The market is attracting companies from the United States (US), Germany, Canada, Netherlands, Israel and many European countries. These firms are either setting up their own offices or partnering with local players.  The market is becoming increasingly competitive and new entrants to the market will have to compete with these international players.  

Tariffs, regulations and customs

The import of water treatment equipment falls under the open category and can be imported by any Indian company with a import- export registration code. Effective import duty for water treatment products are in the range of 26-30 per cent. 

Marketing your products and services

Market entry

Often the best approach to the Indian market is through a local partner. The local partner can a distributor or agent or an Indian company having similar expertise or complimentary skill sets. For urban scale water treatment projects, there are multiple entry options which foreign companies are adopting in India. The preferred models are:

Model one

  • Partnering with Indian company in a JV or consortium to share only the pre-qualifications required to qualify for tenders.
  • Indian company to pay all the tendering cost including the bid bond guarantees. On success, the Indian company will pay a consulting fee (two - three per cent of the project cost (this is negotiable)) and project execution will be carried out by Indian company.
  • There is no investments / financial requirement on part of foreign partner.
  • This is a low risk entry model.
  • There is a reputational risk but this can be mitigated by partnering with an established players in the market.

Model two

  • Partnering with an Indian company in a JV or consortium to share the pre-qualification for tenders and take up the project supervision role while the Indian company will do the project execution. On success- Indian company will pay a consulting fee.
  • Investments / financial requirement on part of foreign partner: Investment in proportion to the percentage of the project component.
  • This is a low risk entry model with long term benefits in gaining first-hand experience in the market.
  • Partnering with Indian company in a JV or consortium and bid for project jointly, share the financial cost associated with the bidding process and get involved in project execution.
  • Investments / financial requirement on part of foreign partner: Investment in proportion to the percentage of the project component
  • There are moderate to high risk benefits with this model, but those who are looking for long term engagement, this is the preferred model.

Links and industry contacts

AMRUT Cities Project 
Central Water Commission
Indian Smart Cities
Ministry of Water Resources, River Development and Ganga Rejuvenation 
National Hydrology Project 
National Mission for Clean Ganga

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