EU Expands CBAM to Affect Indian Exports by 2028
The EU plans to expand its Carbon Border Adjustment Mechanism, impacting 180 new products, notably steel and aluminium, starting January 2028. This initiative may increase costs for Indian exports, especially in engineering and manufacturing sectors, as compliance regulations tighten.
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The European Union's Carbon Border Adjustment Mechanism (CBAM) will include an additional 180 steel- and aluminium-based products from January 1, 2028, significantly impacting Indian exports. The proposal aims to broaden the carbon tax's scope beyond raw materials to various manufactured goods, affecting sectors such as auto components, machinery, and fabricated metals.
Compliance measures will be stricter, banning international carbon credits and potentially including indirect emissions from electricity, which may raise costs for Indian manufacturers reliant on coal-based power. By 2030, most industrial products entering the EU could be subject to carbon tax exposure, necessitating improved emissions accounting and decarbonisation investments for competitiveness in the EU market.
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