Indian textile and chemicals export volumes to the European Union are likely to get dented as manufacturers and suppliers will see a 15-20 per cent hike in input costs due to the EU regulation on chemical management.

The REACH — Registration, Evaluation, Authorisation and Restriction of Chemicals - – regulation is aimed at setting safety standards and protecting human health and the environment from the effects of hazardous chemicals. “We view REACH as a non-tariff trade barrier, but it is difficult to argue against this, as it is promoting environment-friendly measures,” Siddhartha Rajagopal executive director Cotton Textiles Export Promotion Council told FC. The regulation will have a major impact on the Indian chemicals and textiles industry, as these segments comprise a substantial category of the country’s exports to the EU. The EU is India’s largest trading partner. By conservative estimates, total exposure to Indian exports under REACH will be over 1.6 billion euros, according to Reynold D’Souza, chairman, REACH & GHS Expert Committee, Indian Chemical Council.

According to David Horlock, Bureau Veritas’ vice president of new services development, companies that are not REACH-compliant will have to be ready for stringent punishment. The regulation requires that all chemicals of one tonne or more that have been manufactured in or imported into the EU be tested each year for health and safety, and is registered with the new ECA.