In a major boost for Indian exporters, the UK has recognised India’s Carbon Credit Trading Scheme as an eligible carbon-pricing mechanism under its Carbon Border Adjustment Mechanism, or CBAM.
The recognition means Indian goods covered by the UK’s carbon tax – including products such as steel, aluminium, fertiliser and cement – could receive relief for the carbon price already paid in India.
In simple terms, it could help prevent Indian exporters from being charged twice for the same carbon emissions – once in India and again in the UK. The move follows sustained technical discussions between the two countries and could reduce the effective CBAM burden on Indian exports.
However, the amount of relief will depend on the actual carbon price paid under India’s scheme, along with the evidence and verification required under UK rules. The UK is set to implement its CBAM from 2027, making the recognition particularly significant for India’s carbon-intensive exports.
