- NGT profoundly shapes Indian industries’ environmental practices and governance.
- Polluting fuel restrictions impose rising costs and significant compliance burdens.
- Industries now adopt preventive environmental lawyering, seeking phased transitions.
By Kumar Anurag Singh
The National Green Tribunal (NGT) may not command the public attention that constitutional courts often do, but few institutions have had a greater impact on the way Indian industries operate. Established under the National Green Tribunal Act, 2010, the NGT was envisioned as a specialised forum for the speedy resolution of environmental disputes. Over the years, however, it has evolved into a powerful force shaping corporate behaviour, industrial policy, and environmental governance across the country.
One of the clearest examples of this influence can be seen in the restrictions imposed on highly polluting fuels such as furnace oil and petroleum coke (petcoke). While these measures have been widely welcomed by environmentalists and public health advocates, they have also generated significant market volatility, compliance burdens, and legal challenges for manufacturing industries that have historically relied on these fuels.
Prime Minister Modi has repeatedly emphasised that economic development and environmental sustainability must progress together. India’s commitment to achieving net-zero emissions by 2070 and its push towards cleaner industrial growth reflect this philosophy. Yet, as India accelerates its green transition, the legal and commercial realities facing businesses deserve equal attention.
The Legal Basis for Fuel Restrictions
The legal foundation for restricting furnace oil and petcoke is robust. Through a series of judicial interventions, including proceedings arising from the landmark M.C. Mehta environmental litigation, courts and regulators concluded that these fuels contribute significantly to sulphur dioxide emissions and particulate pollution. The Supreme Court, supported by recommendations from environmental authorities, imposed restrictions on their use in Delhi and the NCR. The NGT subsequently played a critical role in ensuring compliance and monitoring implementation across affected industrial clusters.
From a constitutional perspective, the rationale is difficult to challenge. Indian environmental jurisprudence has consistently expanded the scope of Article 21 of the Constitution, recognising the right to a clean and healthy environment as an integral part of the right to life. Principles such as sustainable development, inter-generational equity, and the polluter-pays doctrine have become firmly embedded in judicial decision-making.
The Economic Impact on Industry
However, while the environmental objectives are clear, the economic consequences have been immediate.
For decades, industries such as steel re-rolling mills, foundries, ceramics, glass manufacturing, chemicals, textiles, and engineering units have depended on furnace oil and petcoke because they provide high calorific value at relatively low cost. For many businesses, particularly MSMEs, these fuels were not merely operational choices but essential components of their cost structure.
As restrictions tightened, companies found themselves confronting rising energy costs, technological retrofitting requirements, and uncertainty regarding future compliance obligations. The shift to cleaner alternatives such as PNG, biomass fuels, or electricity often requires substantial capital expenditure. For larger corporations, these investments may be manageable but for smaller enterprises, they can significantly affect profitability and competitiveness.
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Market Reactions and ESG Considerations
The market impact has been equally noteworthy. Regulatory actions affecting fuel-intensive sectors often trigger immediate reactions from investors, lenders, and suppliers. Changes in fuel policy alter production costs, influence earnings forecasts, and affect long-term investment planning. In an increasingly ESG-conscious investment environment, environmental compliance has become a factor influencing both access to capital and corporate valuation.
As a legal practitioner, I have observed a notable shift in the way businesses approach environmental regulation. Earlier, environmental compliance was often viewed as a procedural requirement managed by operational teams. Today, it has become a boardroom issue involving directors, investors, risk managers, and legal advisors.
The Rise of Preventive Environmental Lawyering
This shift has given rise to what may be described as preventive environmental lawyering. Rather than waiting for enforcement action, companies are proactively seeking legal guidance on fuel-transition strategies, environmental audits, consent conditions, and regulatory risk management. Businesses are reviewing their environmental clearances, renegotiating supply contracts, restructuring compliance frameworks, and assessing whether existing infrastructure can support cleaner fuel alternatives.
Importantly, industries are no longer challenging environmental regulations solely on the basis of economic hardship. The nature of legal engagement has evolved. Industry associations increasingly seek phased implementation timelines, sector-specific transition mechanisms, and practical compliance pathways rather than outright exemptions. The objective is not to avoid environmental responsibility but to ensure that the transition remains commercially viable.
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Balancing Environmental Goals and Industrial Realities
Recent proceedings before the NGT demonstrate this evolving dynamic. The Tribunal has repeatedly emphasised that environmental permissions cannot remain mere paperwork and that compliance must be measurable and verifiable. At the same time, industries have argued that certain manufacturing processes cannot be transitioned overnight without affecting production capacity, employment, and supply chains. The resulting dialogue reflects a broader challenge facing India’s regulatory framework: how to reconcile environmental urgency with industrial realities.
Globally, India is not alone in confronting this issue. The European Union’s Green Deal and China’s efforts to curb industrial emissions have similarly imposed short-term compliance costs on manufacturers. However, these jurisdictions have also demonstrated that clear regulatory roadmaps and predictable transition policies can help industries adapt over time.
As India celebrated World Environment Day on June 5, sustainability once again occupied centre stage in public discourse. With the NGT emerging as one of the most influential institutions driving this transformation, its interventions extend far beyond litigation, shaping investment decisions, corporate governance standards, and industrial practices, hopefully acting as a catalyst in India’s transition towards a greener and more resilient industrial future.
(The author is advocate, Supreme Court of India, and Founding Partner – Singh & Mukherjee Chambers, New Delhi)
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