The EU’s Carbon Border Adjustment Mechanism (CBAM) imposes carbon pricing on imports from countries with lenient climate policies, directly impacting Indian exporters in sectors like steel, cement, and aluminium. For Indian SMEs, CBAM brings complex challenges—ranging from limited emissions data tracking and lack of digital tools to verification hurdles and policy uncertainty. This blog outlines key CBAM reporting obstacles and offers proactive strategies to help Indian suppliers achieve compliance and stay competitive.
The European Union’s Carbon Border Adjustment Mechanism (CBAM) marks a significant milestone in climate-related trade regulation. Designed to prevent carbon leakage and promote fairer global climate practices, CBAM reporting challenges include imposing carbon pricing on imports of select goods from countries with less stringent climate policies. While this mechanism primarily aims to curb global emissions, it introduces new compliance burdens—especially for Indian suppliers across energy-intensive sectors like steel, cement, aluminum, and fertilisers.
India, as a major trading partner of the EU and a global manufacturing hub, is feeling the tremors of CBAM implementation. Indian suppliers, particularly small and medium enterprises (SMEs), face a host of challenges in adapting to this new trade-normal. From data accuracy and technological limitations to policy ambiguity and financial burdens, CBAM reporting compliance is anything but straightforward.
In this blog, we dive deep into the major CBAM reporting challenges for Indian suppliers and how they can proactively respond.