Europe's carbon border tax poses fresh challenge for Indian exporters amid FTA talks: FICCI
New Delhi, May 19
Europe's evolving carbon-related trade measures, especially the Carbon Border Adjustment Mechanism, are emerging as a key concern for Indian exporters as the country advances free trade agreement negotiations with European partners, the Federation of Indian Chambers of Commerce and Industry on Tuesday.
Addressing a conference on next-generation trade pacts organised by the Industry body, Secretary General of FICCI, Anant Swarup, said India's exports to Europe are facing both opportunity and pressure as the region tightens regulatory requirements.
Speakers also said while India's trade agreements with Europe offer major opportunities, exporters will need to navigate stricter sustainability and compliance norms to fully benefit.
"Today, India's exports to Europe face both an opportunity and a pressure. Opportunity because of the scale, purchasing power and diversification, and pressure because of increasingly complex standards, sustainability requirements, and carbon-related measures such as CBAM," Swarup said.
He said the challenge lies in converting trade agreements into practical gains for exporters, MSMEs and service providers.
"The task before us is to convert these agreements into practical gains for industry, for exporters, MSMEs, and service providers," he said.
Addressing the same event, Harish Ahuja, Chair, FICCI Foreign Trade and Trade Facilitation Committee, said Europe's regulatory framework could create operational and financial pressures for Indian businesses, especially smaller firms.
"Businesses must increasingly comply with sustainability standards, SPS measures, due diligence requirements and emerging climate related frameworks such as carbon border adjustment mechanism or CBAM. These developments carry important operational and financial implications, especially for MSMEs," Ahuja said.
He added that stronger support systems and industry preparedness would be critical before the trade agreements become fully operational.
The conference focused on leveraging India's partnerships with Europe through the proposed India-UK, India-EU and EFTA trade agreements, with discussions around market access, regulatory standards and services trade.
— ANI
Reader Comments
European standards are getting stricter every year. FTA benefits will be useless if we can't meet these carbon norms. Need to push for more flexibility in CBAM implementation for developing countries like India.
As an exporter based in Mumbai, I can say these regulations are a double-edged sword. On one hand, they push us toward cleaner production; on the other, the cost burden is huge for small businesses. Hope FICCI takes concrete steps to help us navigate this maze.
Honestly, Europe is using climate as a trade barrier. But we can’t complain—our own pollution is hurting us. Time to invest in green technology. Government should provide subsidies for carbon-neutral production. Also, why is FICCI only talking now? Should have prepared earlier! 😐
I work in compliance for a trading firm in Chennai. CBAM is real and coming soon. Our factories will need to track carbon footprint from raw material to finished product. It's a lot of paperwork but we have to adapt. Better start now than panic later.
India should negotiate harder in these FTAs. We need transition periods and financial aid for green upgrades. Europe wants our market but doesn't want to help us meet their standards. Fair trade means two-way accommodation, not one-sided demands.
K Kavya N