Under the recently concluded India-EU Free Trade Agreement (FTA), no India-specific exemption has been granted from the EU’s Carbon Border Adjustment Mechanism (CBAM) for steel exports. However, Indian officials stated that negotiations will remain ongoing and that any flexibility granted by the EU to other countries in the future would automatically apply to India as well.
An Indian government official described the agreement as a “live document”, noting that it is expected to come into effect next year after legal scrutiny and ratification by lawmakers across EU member states. “We will continue to engage with the EU on multiple issues and fine-tune provisions over time,” he said.
India seeks access to EU tariff-free steel quotas
It is understood that India is seeking access to the EU’s tariff-free steel quotas as an FTA partner even before the agreement formally comes into force. Discussions indicate that India may receive a quantitative, volume-based tariff exemption of around 1.6 million mt per year, although this would be roughly half of India’s usual steel export volumes to Europe.
Technical support to help Indian firms comply with CBAM
A dedicated technical group will be established to assist Indian companies in verifying and documenting their carbon footprints. In parallel, a separate cooperation framework is expected to ensure EU technical and financial support to help Indian industry reduce emissions and improve compliance with CBAM requirements.
Rajesh Agarwal, secretary at India’s Ministry of Commerce, emphasized, “CBAM is a horizontal regulation applicable to all trading partners. Within the FTA framework, we have agreed on certain provisions related to CBAM. A technical dialogue mechanism will be set up to help define pathways for Indian industries to maintain market access despite CBAM.”
He added, “Any flexibility that the EU offers to another trading partner in the future will automatically be extended to India.”