Industry experts at a PHDCCI event urged India to strengthen its domestic carbon markets and green finance to help MSMEs comply with the EU's Carbon Border Adjustment Mechanism (CBAM). The EU is India's third largest trading partner, and sectors like steel and aluminium are already feeling pressure. The government is seeking recognition of India's Carbon Credit Trading Scheme (CCTS) by the EU and UK, and trading under the Indian Carbon Market is expected to start by October 2026. Draft compliance targets for steel have been released for public consultation, and the Bureau of Energy Efficiency is leading the effort to build a domestic ecosystem for industrial decarbonization and lower compliance costs for exporters. MSMEs need urgent support through technology adoption, affordable verification infrastructure, and cleaner energy access. SIDBI stressed coordinated policy interventions and affordable financing. The article highlights that carbon competitiveness is now a permanent factor in global market access, and India's steel and aluminium exports to Europe are already under pressure. Strengthening India's carbon pricing framework and building robust MRV capacity are seen as essential for long term trade competitiveness.
