Financing remains a major hurdle for green steel MSMEs in India as EU carbon border tax takes effect

India's steel MSMEs, concentrated in clusters like Raipur and Kolhapur, face a financing gap in their shift to low-carbon production. These small and medium enterprises rely on coal and outdated technology, generating over 50 million tonnes of emissions annually. Decarbonizing them is central to India's 2070 net-zero goal, but most lack the capital to upgrade. The EU's Carbon Border Adjustment Mechanism, now fully operational, adds urgency by taxing carbon-intensive imports. India's iron and steel sector is the most exposed. While the EU-India trade deal includes a CBAM annex and a pledge of 500 million euros in support, the details remain vague. India has launched programs like RAMP to help MSMEs cut emissions, but their impact has been limited so far.