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How to set up an Oxygen manufacturing plant in India?

calendar02 Aug, 2021
timeReading Time: 5 Minutes
Oxygen manufacturing plant in India

The medical & industrial gases industry caters to a massive number of consumers in the whole community. Industrial gases are vital for the industrial sector. A large amount of nitrogen, oxygen, & argon is frequently utilized in the basic and infrastructural industries. The shipping and automobile industry largely relies on propane, acetylene, a combination of fuel gases & oxygen for welding and cutting. Liquid nitrogen is prominently used in the steel-making and plastic recycling industry. The chemical industry employs all prominent industrial gases as material. On the other hand, there is great demand for medical gases in the healthcare sector and it is likely to increase consistently in coming years. Considering the widespread demand for the oxygen in industrial and healthcare sectors,  it is certainly a suitable time for start-ups to establish an oxygen manufacturing plant in India. But erecting such a plant seeks a lot of legal implications that we will be discussing in this blog.

Demand and Market Analysis of Industrial and Medical Gases

Industrial oxygen witnesses a high consumption level as compared to other industrial gases. The demand for industrial oxygen is continued to grow in the Healthcare and the steel sector. Steel companies leverage oxygen to improve furnace performance by enhancing the furnace air, while the healthcare sector uses oxygen at several stages of treatment.

The rise in no. of patients hospitalizing and the increase in respiratory diseases are supporting the growth during the projected period 2020-2025 in the hospital segment. Further, the demand for such gases is likely to increase in the R&D segment due to the utilization of different medical gases in inventing new drugs and medicines. 

Presently, due to the Corrnovirus outbreak, the demand for oxygen has been escalated significantly, as the patient who is critical condition & being under ventilators are supplied with oxygen. The demand for industrial as well as medical gases continues to rise, which in turn create an opportunity for start-ups to set up an oxygen manufacturing plant in India

Read our article:What is the Procedure for Start-up Registration India?

Licenses to be procured to setup oxygen manufacturing plant

Here is the listicle of governmental registration and licenses that are mandatory for setting up Oxygen Manufacturing Plant in India.

procured to setup oxygen manufacturing plant

Incorporation certificate

An incorporation certificate is of paramount importance if you intend to operate as a legit and transparent entity.

Depending on the size of operation, organization hierarchy, and financial framework,  you can opt for an apt business structure from the following

  • LLP
  • One Person Company
  • Private Limited Company
  • Public Limited Company
  • Partnership firm

(Pollution NOC) State Pollution Control Board

Pollution NOC refers to written approval from the State Pollution Control Board to set up or carry any business activity that has the potential of emitting pollutant or trade effluent

Trade Effluent: Trade effluent refers to any liquid waste, other than surface water & sewage that is discharged from the facility being used for trade or industrial processes.

Basic consent certificates for Pollution NOC

Consent to Establish (CTE)

Before the initiation of business activities, like construction, it is a mandate to obtain official approval to set up a business from the SPCB.

Consent to Operate (CTO)

CTO is required when the business is ready to proceed with its operation after the establishment phase. This official consent permits the business owner to commence operations in the place of business for five years. After this period, they are required to renew the same.

Common Documents required for availing NOC from Pollution Board

  • Ownership proof of the premises
  • Electricity and Water Bill
  • Copy of Aadhaar card
  • Pan Card of the Plant
  • Registration proof of the Plant
  • CA letter manifesting total project cost
  • Site Plan of the project

Factory license

Factory license is a mandate for every industrial facility that employs workers and is bound to operate as per Factory Act, 1948. According to the said act, every industry owner should avail registration from the local authorities before initiating their operation.

The Department of Factories and Boilers are vested with the right to grant such a license. The said department regulates the health, safety, and welfare aspects of employees working in such an establishment.

Fire safety clearance

Fire safety clearance generally refers to a certificate of conformity to the requirements of fire safety, which is granted to the educational institutions, hospitals, factories, government, and private offices, and residential apartments post the completion of the Fire Safety Audit.

To get this applicant can visit the state fire service department through an online portal and fill a relevant e-form.

Conditions under which the obtainment of fire safety clearance become mandatory

  • The industrial building having a usable area on all floors more than 250 sq m.
  • The buildingis used as storage having areas on all floors more than 250 sq m.
  • All Hazardous buildings possessing useable area on all floors more than 100 sq m.

Consent from Petroleum and Explosives Safety Organization (PESO)

Products that seek PESP approval in India include pressure vessels and products for the gas, oil[1], & coal, explosion-proof products.

The PESO approval process involves the following steps:

  • Preparation of the application documentation.
  • Tests for type permission ( only for particular products)
  • Factory audit (only for specific products forex: pressure vessels)
  • Document verification
  • Issuance of PESO registration.
  • Issuance of the registration of the Authorized Indian Representative (AIR)

After the grant of the PESO approval, the products shall become eligible for import. The authority generally considers certified test reports such as ATEX or IECEx. In the absence of these reports, the products shall be tested in India in any case.

Paper works to obtain PESO approval

The paperwork for the PESO approval differs country-wise. Meaning-documents to be submitted by the local entity shall not be identical to its counterpart located in an overseas location.

The paperwork is of paramount importance when it comes to PESO approval. For successful certification, it is pertinent to fully understand the commercial and technical aspects of the product.

Applicant must provide the Documents of the following categories for successful certification:

  • Application documents ( contract with AIR for minimum of 5 years, application form, technical competence)
  • Organization details (incorporation certificate, plant, and AIR, organizational hierarchy, PESO responsible person, etc)
  • Product details (ATEX/ IECEx certificates, Quality Assurance Registration, list of machinery & test instruments, ISO certificates)
  • Commercial information (Sales detail for the last 3 years, List of active clients, documentary proof such as client’s order copy, hazardous area installation detail manifesting installation perimeter & intended use of machinery, etc)

Additional Post-incorporation Certifications for oxygen manufacturing plant


It is recommended to hire a professional or SMEs before opting for equipment and machinery for an oxygen manufacturing plant. Experts come in handy at several levels of oxygen manufacturing plant setup right from equipment selection, erection, process automation, approval, and business development.

Read our article:Benefits of Startup India Registration in India

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