India must strengthen carbon markets as EU CBAM reshapes trade: Industry
New Delhi, July 3
India must strengthen domestic carbon markets and green finance and help micro, small and medium enterprises meet compliance costs as the European Union's Carbon Border Adjustment Mechanism reshapes export competitiveness, industry experts said on Friday.
An event organised by the PHD Chamber of Commerce and Industry (PHDCCI), here drawing senior government officials, industry leaders and experts to discuss CBAM readiness and industrial decarbonisation.
Experts informed that the government is actively engaging with the European Union and the United Kingdom to secure recognition of India's Carbon Credit Trading Scheme (CCTS), facilitate acceptance of Indian accredited carbon verification agencies for CBAM compliance, and explore comparative benchmarking mechanisms that better reflect India's energy profile.
Dr Jatinder Singh, Deputy Secretary General, PHDCCI, said that the European Union's CBAM has made carbon competitiveness a permanent determinant of global market access. He highlighted that the EU, India's third-largest trading partner with bilateral goods trade of nearly €118 billion, is a key destination for Indian exports in sectors such as iron & steel, aluminium, cement and fertilisers.
India's steel and aluminium exports to Europe have already witnessed pressure, signalling the urgency for industry to strengthen emissions monitoring and carbon reporting systems, he noted.
MSMEs require urgent support through technology adoption, affordable verification infrastructure, cleaner energy access and simplified reporting mechanisms.
He further called for strengthening India's carbon pricing framework, accelerating industrial decarbonisation and building robust institutional capacity for Measurement, Reporting and Verification (MRV) to ensure India's long-term competitiveness in global trade.
Satyaki Rastogi, Chief General Manager, SIDBI stressed the need for coordinated policy interventions, common testing and certification facilities, awareness and capacity-building programmes, and affordable financing solutions to facilitate the transition.
Saurabh Diddi, Director, Bureau of Energy Efficiency (BEE), Ministry of Power, announced that draft compliance targets for the steel sector under the CCTS have been released for public consultation, while trading under the Indian Carbon Market is expected to commence by October 2026, creating a domestic ecosystem to support industrial decarbonisation and reduce compliance costs.
— IANS
Reader Comments
Finally some serious talk on carbon markets! But why is the focus only on steel and aluminium? Our textile and chemical sectors also export to EU and will be hit. Hope the government includes all sectors in CCTS. Also, affordable financing for MSMEs is key—they can't afford expensive verification. 👍
CBAM is unfair to developing nations like India. Our per capita emissions are much lower than EU's, yet they want to penalize us. We need to challenge this at WTO. Meanwhile, Indian Carbon Market by 2026 is a step forward but needs faster implementation. Otherwise our exports will lose competitiveness.
Good to see BEE releasing draft compliance targets for steel. But what about transparency? Who will monitor the carbon credits? We need strong MRV framework to avoid greenwashing. MSMEs must be given subsidies for clean tech adoption—they are the backbone of our economy.
As someone who works in trade, CBAM is inevitable. EU has set the rules and we must adapt. The Indian Carbon Credit Trading Scheme is a smart move—it can even become a template for other developing nations. But MSME support is non-negotiable. They need low-interest green loans and shared testing facilities.
EU should recognize India's CCTS—we are not a polluter like China. Our renewable energy targets are ambitious. PHDCCI event is good but we need action on ground. MSMEs in Ludhiana and Jamnagar are already worried. Government must set up CBAM helpdesks in export clusters.