EU’s proposed CBAM expansion may impact Indian exporters: GTRI

The European Union (EU) is planning an expansion of its Carbon Border Adjustment Mechanism (CBAM) and the move could increase carbon tax costs on Indian manufactured exports to Europe, think tank Global Trade Research Initiative (GTRI) said on Thursday.

The think tank said that Indian exporters selling into Europe may need to accelerate emissions accounting, supply-chain traceability, and decarbonisation investments to remain competitive in one of the country's key export markets. In a draft report issued on April 10, 2026, the European Parliament's Committee on the Environment, Climate and Food Safety proposed five major changes to the CBAM regime.

The changes include extending CBAM to around 180 additional steel-based and aluminium-based manufactured products from Jan 1, 2028; and tightening carbon accounting rules for scrap-based production by including emissions from pre-consumer scrap, GTRI said.

It also includes examining expansion of the mechanism to indirect emissions from electricity use across more sectors.

"Together, these steps would turn CBAM from a tax mainly on steel and aluminium raw materials into a much wider carbon tax covering manufactured industrial goods," GTRI founder Ajay Srivastava said.