India joins OECD pact on mutual acceptance of chemical safety data

The multi-crore domestic chemical industry on Wednesday got a booster dose with India joining the Mutual Acceptance of Data (MAD) in the assessment of chemicals being benchmarked by the rich country club, the Organisation for Economic Cooperation & Development (OECD).

This would help pave the way for the removal a potential non-tariff trade barrier between countries for marketing chemicals. India is the third emerging economy to join this pact after South Africa and Brazil.

In a communiqué issued in Paris today, the inter-governmental think-tank of rich countries said the OECD Mutual Acceptance of Data system is a multilateral pact which saves governments and chemical producers around €150 million every year by allowing the results of a variety of non-clinical safety tests done on chemicals and chemical products such as industrial chemicals and pesticides, to be shared across OECD and other signatory countries.

India's entry into this pact would ensure that the results of non-clinical chemical safety testing done in India would be accepted in all other participating countries. Besides all the OECD members, provisional adherents to the MAD system include Argentina, Brazil, Malaysia and Thailand.

Hailing India's entry into the OECD specific pact on mutual acceptance of chemical safety data, the OECD Secretary-General, Mr Angel Gurria, said, “India's engagement in OECD's work on chemical safety and its membership in our MAD system is indicative of the mutual benefit of ever-closer relationship between OECD and major emerging economies”.

The MAD mandates that testing should be carried out using OECD standards for test methods and for data quality. Governments need to verify compliance of laboratories with the latter standard by using the OECD agreed producers. OECD countries — and now India, South Africa and Singapore — have implemented this system through the appropriate legislative and administrative procedures.

As testing of chemicals is a labour-intensive and expensive process with duplication being quite common as the same chemical is being tested and assessed in several countries, the OECD Council adopted a decision way back in 1981 to relieve some of this burden.

Accordingly, it was agreed that data generated in a member country in accordance with OECD Test Guidelines and Principles of Good Laboratory Practice (GLP) should be accepted in other member countries for assessment purposes and other uses pertaining to the protection of human health and the environment.

A further Council Act was adopted in 1989 to provide safeguards for assurance that the data is indeed developed in compliance with the Principles of GLP.

Subsequently a 1997 Council decision on the Adherence of non-member countries to the Council Acts related to the MAD in the assessment of chemicals set out a step-wise procedure for non-OECD countries with significant chemical industry to take part as full members in this system. Thus, India has joined this pact to benefit its numerous chemical exporters, manufacturers and chemical suppliers dealing in fine chemicals organic chemicals and inorganic chemicals.

More importantly, in recent years, there has been a marked rise in the number of inorganic chemical exporters, chemical manufacturers and chemical wholesalers of India with the current annual turnover of chemicals hovering above Rs 90,000 crore according to industry estimates.

The chemical industry comprising fine chemicals and organic and inorganic chemicals accounts for about 17 per cent of India's total industrial production and 16 per cent of the export of manufactured goods.

Commerce Ministry's latest export data as set out in the annual report just released show that during the first half of the just-ended 2010-11 fiscal, the value of exports of chemicals and allied products rose to $13.99 billion from $10.96 billion, logging a 28 per cent growth.

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