Chemical factories operating in the Tarapur MIDC estate in Maharashtra are steadily shifting operations to Gujarat, citing challenges in meeting environmental clearance norms – particularly the mandatory 40% green cover requirement within factory premises. Most of these units are 25–30 years old and now face urgent needs for expansion, upgradation, or diversification. However, the green cover mandate under the 2006 EIA Notification has made it nearly impossible for factories with limited land to proceed.
Gujarat’s Flexible Green Norms Attract Relocations
In contrast, Gujarat’s regulatory framework allows companies to fulfil green cover obligations externally—on government land, forest tracts, or even private property. This flexibility, coupled with better incentives and ease of clearances, has led to a surge in factories relocating to Gujarat’s industrial zones like Sayakha and Dahej.
“Already six-seven chemical companies have moved their operations to Gujarat, and another 20–25 are in the process of relocating,” said SR Gupta, Secretary of the Tarapur Industrial Manufacturers Association (TIMA). Many have begun setting up additional units in Sayakha, with around 40% of their workforce already shifted in anticipation of the transition he added.
Limited Land and FSI Stifle Expansion
Factories in Tarapur are typically built on 800–1,000 square metre plots and have already maximized their Floor Space Index (FSI). The need for internal infrastructure – roads, safety areas, storage, and utilities—leaves little room for tree plantations or further development.
“This land constraint makes compliance with the 40% green cover rule virtually impossible,” said Nilesh Patil, a TIMA member. “We are willing to invest in environmental sustainability, but the inflexibility in implementation is forcing us to look elsewhere,” he added.
Environmental Compliance Costs Add to Pressure
TIMA members highlighted that any attempt to modify product lines, increase capacity, or update manufacturing processes triggers the need to comply with the 40% green cover mandate, along with expensive environmental infrastructure upgrades. These include:
- No-objection certificates for using treated effluents from the Common Effluent Treatment Plant (CETP)
- Installation of Zero Liquid Discharge (ZLD) plants, costing between ₹5–9 crore
Such requirements are financially burdensome, particularly for small and medium enterprises, which make up a significant portion of the 612 chemical factories within Tarapur MIDC—only 450 of which are currently operational.
Call for Maharashtra to Adopt Gujarat’s Model
Industry stakeholders are urging the Maharashtra government to consider policy amendments similar to those in Gujarat. A June 5, 2024 circular from the Gujarat Pollution Control Board (GPCB) permits industries to fulfil green cover mandates by developing green zones outside their premises.
Additionally, the Gujarat Industrial Development Corporation (GIDC) offers land at more competitive rates, and assists businesses with faster clearances and approvals, making the state an increasingly attractive destination for chemical manufacturers.
Flexibility Key to Retaining Industrial Investment
The situation in Tarapur underscores the need for adaptive, industry-friendly environmental policies that support sustainable growth without stifling innovation or investment. As reported by hindustantimes.com, unless Maharashtra revises its approach, more chemical factories may continue migrating to states like Gujarat, where development and environmental responsibility go hand-in-hand.
