1 month ago
India-EU FTA Includes Work Plan to Tackle CBAM
India and the European Union are making a trade deal that helps Indian companies sell goods to Europe.
The deal has a special plan to deal with a new EU rule called CBAM, which adds a tax on products that produce a lot of carbon.
The plan will help small and medium businesses figure out how much carbon is in their products and get the right certificates.
India is also working on its own carbon pricing system.
The government will visit many districts and use digital tools to explain the deal to businesses.
The trade talks finished in January 2026, and the agreement should be signed soon and start working next year.
India-EU free trade agreement includes annexure on CBAM to protect SMEs.
Work plan addresses verification, embedded carbon calculation, and EU-recognised verifiers.
Agreement allows India to benefit from any future EU CBAM flexibility.
India is developing its own carbon pricing mechanism to offset EU tax.
Outreach program targets 700+ districts and uses digital tools to educate exporters.
- Who
- Additional Secretary Darpan Jain and Indian SMEs
- What
- India-EU free trade agreement with a CBAM work plan
- Where
- India and the European Union, discussed at the Indo-German Chamber of Commerce
- When
- Negotiations concluded January 27, 2026; CBAM effective January 1, 2026; agreement to be signed later this year and operational next year
- Why
- To mitigate the impact of the EU carbon tax on Indian exporters, especially SMEs, and to secure future EU flexibility
Key facts
- FTA Negotiation Conclusion
- January 27, 2026
- CBAM Effective Date
- January 1, 2026
- SME Outreach Districts
- 700+
- India's Carbon Pricing Mechanism
- Under development
- Expected Signing Date
- Later this year (2026)
- Expected Implementation
- Early next year (2027)
Quotes
Commerce Department Additional Secretary Darpan Jain
Senior official from India's Commerce Department
“"CBAM compliances are a concern among SMEs in terms of verification, in terms of finding out what is the value of embedded carbon, in terms of ensuring that the verifiers are recognised by the EU authorities. So there is a comprehensive work plan under the annexure on CBAM and we are working on it. I am very hopeful that SMEs will not face any problem,"”
thehindubusinessline.com
financialexpress.com
thehansindia.com
deccanchronicle.com
“"We also have a provision in which we can engage with EU authorities on taking into account the carbon price which is paid in India ... how to offset what is paid in India from what is paid in Europe,"”
thehindubusinessline.com
Sources
India-EU Trade Deal Set to Address CBAM Hurdles, Says Official
India-EU FTA has work plan to address CBAM concerns: Official
EU FTA has provisions to address CBAM concerns: Centre
India-EU FTA has provisions to address carbon tax issues: Official
India-EU FTA Includes Comprehensive Work Plan To Address Carbon Tax Concerns: Official
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