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NITI Aayog proposes faster green nods for chemical sector
The average clearance now takes 451 days — 196 days longer than the prescribed 255-day timeline — with 90% of projects facing delays, according to the report
The government think-tank NITI Aayog on Thursday called for sweeping reforms to slash environmental clearance times for chemical manufacturing projects from nearly two years to six months, citing bureaucratic delays that it said deterred foreign investment.
The average clearance now takes 451 days — 196 days longer than the prescribed 255-day timeline — with 90% of projects facing delays, according to a report launched in Delhi by NITI CEO BVR Subrahmanyam and vice chairman Suman Bery.
“These delays significantly inflate project costs and disrupt industrial development,” the report stated, noting India’s approval process takes substantially longer than the United States’ one year or the European Union’s 12-18 months for major projects.
The report, titled “Chemical Industry: Powering India’s participation in Global Value Chains,” identifies prolonged public consultations, documentation inconsistencies and insufficient regulatory resources as primary causes of delays.
NITI Aayog proposes establishing a dedicated oversight committee under the ministry of commerce and industries by 2026, aiming to ensure fewer than 10% of projects face delays. The committee would work alongside the Environment Ministry to identify bottlenecks and publish quarterly progress reports.
Key reforms include granting the expert appraisal committee autonomy to make final decisions, eliminating validation requirements by the Environmental Impact Assessment Authority (EIAA) — a change that could save 45 days. Alternatively, companies could proceed with provisional “deemed” environmental clearances.
The current approval process requires multiple stages: application submission, screening and classification, public consultation, environmental impact assessment scrutiny, expert appraisal and final authority decision. Delays are most acute during screening, expert appraisal and the final decision stage.
The report suggests allowing companies to begin certain construction activities at their own risk whilst awaiting final approval, specifically civil construction for capital expansion or product mix changes not requiring public hearings.
Additional proposals include allowing chemical parks to grant pre-environment clearances to industries and exempting fresh clearances when product mix changes don’t increase pollution loads.
“Easing the EC process could enhance the supportive regulatory environment without compromising the environment,” the report concludes, citing potential improvements to India’s ease of doing business ranking.
