NRI Problems: How Indian firms are dealing with global warming

India's refineries will be mandated to use green hydrogen starting from 2023-24.
India's refineries will be mandated to use green hydrogen starting from 2023-24.

Dubai - To reduce carbon footprint, the government is now going to make it mandatory for industries to use green hydrogen

By H.P. Ranina

Published: Sat 14 Aug 2021, 8:03 PM

Last updated: Sat 14 Aug 2021, 8:06 PM

With global warming reaching unprecedented proportions resulting in adverse climate changes, is India preparing itself to meet this challenge considering its vast coastline and the number of cities located on the seafront?

As a strategy for reducing environmental pollution, a new policy has been announced making it mandatory for refineries and polluting industries to use green hydrogen. Hydrogen has wide application in the industrial sector; green hydrogen is the cleanest fuel as it is produced through electrolysis using renewable energy. Refineries will be mandated to use green hydrogen starting from 2023-24.

Fertiliser producers will also be required to use a minimum five per cent of green hydrogen in the first year, which will go up gradually every successive year. Currently, refineries and other industries produce grey hydrogen from natural gas, which produces carbon dioxide as a by-product. To reduce the carbon footprint, the government is now going to make it mandatory for Indian industries to use green hydrogen. It is estimated that the cost impact of green hydrogen will be negligible and the environmental benefit will be enormous.

Exports of goods and merchandise from India have been sluggish in the last few months partly due to the fall in global demand. What steps are being taken to reverse this trend?

The government has fixed an ambitious target for exports at the figure of $400 billion. This has been done after detailed consultations with overseas Indian missions. Under this strategy, 200 countries have been identified. The export targets have been fixed based on regions and countries; products and commodity groups; and support from export promotion councils. At present, monthly exports average $32.5 billion.

The commerce ministry is projecting a 37 per cent increase in merchandise exports during the current financial year. This effort will specially benefit micro, small and medium enterprises as well as labour-intensive industries, creating higher potential for employment.

I have been informed that the Securities and Exchange Board of India (Sebi) has recently made fundamental changes pertaining to promoter shareholders. Will this affect private equity and venture capital companies that are getting listed on Indian stock exchanges?

Sebi has done away with the traditional concept of a promoter. It is now proposed to have regulations pertaining to persons in control or controlling shareholders. This is done to take care of new-age companies listed on stock markets with diversified shareholding and professional management. These companies are not family-owned and do not have a distinctly identifiable promoter base. This decision of Sebi has been welcomed because the concept of person in control is more realistic than the concept of a promoter.

In the case of newly listed companies, the lock-in period for 20 per cent of controlling shareholders holding is reduced to 18 months from the earlier period of three years. For others, the lock-in period is reduced from one year to six months. This decision will have the potential to increase liquidity in the market which will result in fair pricing and less volatility.

H.P. Ranina is a practicing lawyer, specialising in tax and exchange management laws of India

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