Archive · 9 Sep 2026
UK Recognises India’s Carbon Scheme, Easing CBAM Burden for Exporters
The UK will charge some imported goods based on the pollution created when they were made.
India has a Carbon Credit Trading Scheme that puts a price on some greenhouse-gas emissions.
The UK has said this scheme can qualify for relief under its carbon border tax rules.
This means an eligible carbon price paid in India may reduce the amount charged in the UK.
The relief is meant to help prevent the same carbon cost from being charged twice.
UK importers must provide evidence and pass verification checks to receive it.
The UK system starts in January 2027 and covers goods such as steel, aluminium, cement, fertiliser and hydrogen.
The amount of relief will depend on the carbon price linked to the goods and cannot exceed the UK CBAM liability.
The UK has included India’s Carbon Credit Trading Scheme in its indicative list of qualifying carbon-pricing mechanisms under CBAM rules.
UK importers can seek relief for eligible carbon prices already borne by covered Indian goods under the scheme.
Relief is not automatic and requires evidence and verification under UK law.
The UK CBAM begins in January 2027 and covers products including iron, steel, aluminium, cement, fertiliser and hydrogen.
India exported $13.4 billion in merchandise to the UK in 2025-26, including $893.4 million in iron and steel products and $94 million in aluminium.
- Who
- The United Kingdom and India, including Indian exporters and UK importers of covered goods.
- What
- The UK has recognised India’s Carbon Credit Trading Scheme as a qualifying carbon-pricing mechanism, allowing eligible Indian carbon costs to reduce UK CBAM liability.
- When
- The UK CBAM takes effect in January 2027; the recognition was communicated on Monday, according to the articles.
- Where
- The measure applies to eligible goods manufactured in India and imported into the United Kingdom.
- Why
- To account for eligible carbon prices already paid in India and help avoid charging carbon costs twice on the same goods.
- Recognised scheme
- India’s Carbon Credit Trading Scheme
- UK CBAM start
- January 2027
- Relief eligibility
- Covered goods must have borne an eligible carbon price under India’s scheme.
- Claim requirements
- UK importers must satisfy evidence and verification requirements under UK law.
- Relief limit
- Relief cannot exceed the UK CBAM liability on the goods.
- Covered products
- Iron, steel, aluminium, cement, fertiliser and hydrogen
- India-UK merchandise exports
- $13.4 billion in 2025-26, including $893.4 million in iron and steel products
