Laws and regulations:India


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Indian Acts, rules, policies on Small and Medium Enterprises

India has strong environmental policy and legislative frameworks with well established institutions at national and State level. It has a number of environmental regulations including those for water and air pollution, solid waste and energy conservation. India is currently developing a climate change strategy.


Environmental Regulations

  • The Indian Forest Act (1927)
  • Wildlife Protection Act (1972, amended 1993)
  • The Water Prevention and Control of Pollution Act (1977) sets standards and controls on the level of pollution entering water sources and sets requirements for treatment of waste before it is disposed of.
  • Environmental Protection Act (1986) is used by the Ministry of Environment and Forests to set standards for the protection of the environment. It sets limits on the amount of pollution that industries may produce and sets punishments for offending companies.
  • Air Prevention and Control of Pollution Act (1981) aims to improve air quality through the prevention, control and abatement of air pollution and the setting of standards of air pollution control equipment. The Motor Vehicle Act (1980) sets limits on the amount of particulates that motor vehicles can emit.
  • Hazardous Waste Management and Handling Rules (1989 – amended in 2000) sets standards of disposal of hazardous waste, sets the duties of the handlers of hazardous waste plants, and grants authorisations for the handling of hazardous waste. It prohibits the import or export of hazardous waste for dumping or recycling.
  • Environmental Impact Assessment (EIA) (1994) was formally introduced in India in 1994 making Environmental Clearance (EC) mandatory for expansion or modernisation of any activity or for setting up new projects listed in Schedule 1 of the notification. Since then there have been 12 amendments made to the original EIA notification of 1994. The Ministry of Environment and Forests recently notified new EIA legislation in September 2006. The notification makes it mandatory for various projects such as mining, thermal power plants, river valley projects, infrastructure (roads, highways, ports, harbours and airports) and industries including very small electroplating or foundry units to get environment clearance. However, unlike the EIA Notification of 1994, the new legislation has put the onus of clearing projects on the state government depending on the size/capacity of the project.
  • The National Environment Appellate Authority Act (1997)
  • Bio-medical waste management & Handling Rules (1998)
  • Environment (Siting for Industrial Projects) Rules (1999)
  • Recycled Plastic Manufacture and Usage rules (1999)
  • Ozone Depleting Substances (Regulation) Rules (2000)
  • Municipal Solid Waste Management Rules (2000) sets standards on disposal and treatment of solid waste. Responsibility for implementing these rules lies with the municipalities. The state board or committee is responsible for ensuring the rules are implemented. The state government has overall responsibility.
  • The Energy Conservation Act (2001) provides the regulatory framework to support an energy efficiency drive across India. A bureau of Energy Efficiency has been established for the Act.
  • Batteries Management & Handling Rules (2001)
  • The National State of the Environment Report (2001) provides guidelines for environmental action planning, policy setting and resource allocation for the coming decades. Five key environmental issues that are highlighted in the report are land degradation, biodiversity, air pollution and control, management of fresh water resource, and hazardous waste management.
  • The Electricity Act (2003) was passed to support the development of electricity across India. There is a drive to develop electricity in rural areas to increase the number of people with access. The Act aims to provide a liberal framework to promote competition in the power sector.


  • National Forest Policy (1988),
  • National Conservation Strategy
  • The Scheme on Labeling Environment Friendly Products (1991)
  • The Criteria for Labeling Cosmetics as Environment friendly Products (1992)
  • Policy Statement on Environment and Development (1992)
  • Policy Statement on Abatement of Pollution (1992)
  • National Ambient Air Quality Standards (1994)
  • Prohibition on the Handling of Azodyes (1997)
  • Wildlife Conservation Strategy (2002).
  • National Water Policy (2002).
  • National Environment Policy (2004) is a guide to action in regulatory reform, programmes and project for environmental protection.
  • National Policy on Climate Change.

Acts and Laws applicable to Small Scale Industries

  • Registration related Laws Industrial Development Regulation Act
  • Labour related Laws and Reforms by states
  • Tax related Laws
  • Local & Other Municipal Laws
  • Product & Process
  • Other Central Acts


Despite the significant number of laws that are in place, the enforcement mechanisms are relatively weak. Sanctions available to the regulator are deemed to be either too extreme to be routinely used (eg shutting down units) or too time consuming to pursue (eg filing a criminal case on a company that violates the law). A World Bank Report (2007) on India’s institutions associated with the environmental market concluded that much remains to be done to strengthen the regulatory, enforcement, and incentive mechanisms at the disposal of environmental agencies. The tools that regulators use for compliance need to be strengthened and expanded. New approaches to target whole activities rather than point sources, i.e. single localised sources of pollution, with specific targeting of SSIs, municipal sources of waste and pollution, industrial and transport sources should be adopted. Regulations on service quality and service obligations in the Power sector are yet to be enforced as state regulatory commissions struggle with distorted tariff structures and poor data quality for monitoring purposes