The European Union's Carbon Border Adjustment Mechanism (CBAM) is creating new hurdles for Indian exporters, particularly in the steel, aluminum, cement, and fertilizer sectors. As India negotiates free trade agreements with European nations, these carbon-related trade regulations are adding significant financial and operational pressure on businesses. Industry leaders from FICCI warn that small and medium enterprises may struggle most with the strict environmental compliance and reporting standards required by the EU. The shift links trade competitiveness directly to carbon emissions, forcing a faster transition toward low-carbon industrial processes to maintain market access.
