India wants last-mile concessions on CBAM from EU

India is seeking last-mile concessions from the EU, specifically pressing for flexibility in meeting CBAM (Carbon Border Adjustment Mechanism) obligations through alternative offset mechanisms, as both sides move to push the Free Trade Agreement (FTA) talks significantly towards conclusion this month. Negotiators are also aiming to secure higher quotas for concessional steel exports. Ways to reduce the negative impact of CBAM — which aims to prevent carbon leakage by ensuring imported carbon-intensive goods face a comparable carbon price to that paid by EU domestic producers under the EU Emissions Trading System (ETS) — is one of the top items on India’s agenda. The identified goods include steel, aluminium, cement and fertilisers. Exporters of steel and aluminium from countries without a comparable domestic carbon pricing system, such as India, may need to cut prices by 15-22 per cent to absorb the cost of the new tax and remain competitive, per industry estimates, as per a report.

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