Europe's CBAM emerges as key concern for Indian exporters: FICCI

FICCI has voiced concerns that Europe's new carbon-related trade policies, like the Carbon Border Adjustment Mechanism (CBAM), pose a significant challenge for Indian exporters, particularly MSMEs, amid ongoing free trade agreement negotiations.

Europe's evolving carbon-related trade measures, especially the Carbon Border Adjustment Mechanism (CBAM), are emerging as a key concern for Indian exporters as the country advances free trade agreement negotiations with European partners, the Federation of Indian Chambers of Commerce and Industry (FICCI) on Tuesday.

Addressing a conference on next-generation trade pacts organised by the Industry body, Secretary General of FICCI, Anant Swarup, said India's exports to Europe are facing both opportunity and pressure as the region tightens regulatory requirements. Speakers also said while India's trade agreements with Europe offer major opportunities, exporters will need to navigate stricter sustainability and compliance norms to fully benefit.

FICCI Highlights Dual Challenge of Opportunity and Pressure

"Today, India's exports to Europe face both an opportunity and a pressure. Opportunity because of the scale, purchasing power and diversification, and pressure because of increasingly complex standards, sustainability requirements, and carbon-related measures such as CBAM," Swarup said. He said the challenge lies in converting trade agreements into practical gains for exporters, MSMEs and service providers. "The task before us is to convert these agreements into practical gains for industry, for exporters, MSMEs, and service providers," he said.

Impact on MSMEs and Call for Preparedness

Addressing the same event, Harish Ahuja, Chair, FICCI Foreign Trade and Trade Facilitation Committee, said Europe's regulatory framework could create operational and financial pressures for Indian businesses, especially smaller firms. "Businesses must increasingly comply with sustainability standards, SPS measures, due diligence requirements and emerging climate related frameworks such as carbon border adjustment mechanism or CBAM. These developments carry important operational and financial implications, especially for MSMEs," Ahuja said. He added that stronger support systems and industry preparedness would be critical before the trade agreements become fully operational.

The conference focused on leveraging India's partnerships with Europe through the proposed India-UK, India-EU and EFTA trade agreements, with discussions around market access, regulatory standards and services trade. (ANI)

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