India advanced its CBAM response on three fronts within twelve days in July 2026. At a PHD Chamber of Commerce and Industry (PHDCCI) event in New Delhi reported on July 3, Bureau of Energy Efficiency (BEE) director Saurabh Diddi said draft steel-sector compliance targets under India's Carbon Credit Trading Scheme (CCTS) have been released for public consultation, with trading under the Indian Carbon Market expected by October 2026. On July 15, Commerce Minister Piyush Goyal co-chaired the 3rd India-EU Trade and Technology Council (TTC) Ministerial in Brussels, where the 2026-27 TTC Action Plan was adopted and the discussions explicitly covered CBAM.
The stakes are concrete for both sides of the trade. India's steel and aluminium exports to the EU fell 24.4 percent in FY2025 before a single CBAM certificate was purchased. Whether the CCTS wins recognition as a qualifying carbon price, and whether Indian accredited verification agencies are accepted for CBAM compliance, now directly moves the landed cost of Indian steel and aluminium in the EU.
Steel targets in consultation, carbon trading expected by October
Draft compliance targets for India's steel sector under the Carbon Credit Trading Scheme are open for public consultation, and trading under the Indian Carbon Market is expected to commence by October 2026, BEE director Saurabh Diddi told the PHDCCI event. Both elements remain plans rather than settled rules: the steel targets are drafts until notified, and the October date is a government expectation, not a legal deadline.
Diddi said the market will create a domestic ecosystem to support industrial decarbonisation and reduce compliance costs. PHDCCI deputy secretary general Dr Jatinder Singh framed the trade backdrop bluntly: "The European Union's CBAM has made carbon competitiveness a permanent determinant of global market access." Singh described the EU as India's third-largest trading partner, with bilateral goods trade of nearly €118 billion, and India's CBAM exposure is concentrated in four sectors: iron and steel, aluminium, cement, and fertilizers.
Industry speakers also pressed for help with compliance costs for micro, small, and medium enterprises (MSMEs). Four support needs recurred across the event:
- Technology adoption assistance for lower-carbon production
- Affordable verification infrastructure
- Access to cleaner energy
- Simplified reporting mechanisms
Recognition under Article 9 is the real prize
Speakers confirmed the Indian government is actively negotiating with the EU and the UK to secure recognition of the CCTS and acceptance of Indian accredited verification agencies for CBAM compliance. Recognition is the step that converts a domestic carbon market into a cost reduction at the EU border. Article 9 of Regulation (EU) 2023/956 allows an authorized declarant to claim a reduction in surrendered certificates corresponding to a carbon price effectively paid in the country of origin.
The rules that would operationalize that claim exist only in draft form. The draft CBAM carbon price deduction rules set four pathways for recognizing foreign carbon prices and cap Article 6 credits at 10 percent, and member states are due to vote in September on which foreign carbon prices count. The CCTS is not currently a qualifying scheme, so imports of Indian goods carry full certificate liability today.
A functioning Indian Carbon Market changes the raw material of that negotiation. Once steel-sector entities face binding targets and a traded certificate price, Indian producers would for the first time pay a documented domestic carbon cost that an EU importer could claim through the step-by-step Article 9 deduction, provided the EU recognizes the scheme and the price is effectively paid without rebates that cancel it out.
The verification track runs in parallel. CBAM requires embedded emissions data to be verified by accredited verifiers, verifier registration opens September 1, 2026, and the Commission has just opened the CBAM verifier pipeline. India's ask is that its own accredited agencies be accepted, so Indian producers do not pay for parallel verification systems to serve one export market.
Why the rush: EU exports fell 24.4 percent before the first bill
India's steel and aluminium exports to the EU fell 24.4 percent in FY2025, with steel alone down 35.1 percent, before any CBAM financial obligation took effect, according to a pv magazine India analysis published July 14. The decline reflects European buyers reorienting toward lower-emission suppliers ahead of the cost curve, not the certificate cost itself.
The 2026 certificate cost is still small. Blast furnace (BF-BOF) steel embeds roughly 2.0 tCO₂ per tonne, and with the 2.5 percent CBAM factor and the Q2 2026 certificate price of €75.28/tCO₂e, the certificate cost on a tonne of BF-BOF steel comes to under €4. That liability rises every year as EU free allocation phases out toward full carbon cost by 2034 under current law, although a tabled ETS revision would slow the CBAM phase-in to 2038 if adopted. European buyers are pricing the full trajectory, which is why steel exporters to the EU see purchasing decisions shift years before the cost peaks. The exposure picture by producer and product is covered in the CBAM India country guide.
The pv magazine analysis also flagged two design choices that will determine whether the CCTS produces a credible price. The power sector, which accounts for about 40 percent of India's greenhouse gas emissions, sits outside the scheme for now, and early participation is restricted to compliance entities. The analysis argued that market depth depends first on whether targets create genuine compliance pressure, citing thin trading in Korea's ETS after surplus allowances and the shortfall in certificate trading under India's earlier PAT scheme.
CBAM at the India-EU TTC ministerial
Commerce Minister Piyush Goyal co-chaired the 3rd India-EU Trade and Technology Council Ministerial in Brussels on July 15, 2026, where the 2026-27 TTC Action Plan was adopted and discussions explicitly included cooperation on CBAM alongside regulatory simplification and market access. The Brussels meeting was the centerpiece of a July 13-18 Europe tour that also took Goyal to Spain, Finland, and Estonia, fiinews reported.
Placing CBAM inside the TTC framework moves the recognition question from technical exchanges to the ministerial level. India is running a dual track: it has formally opposed CBAM as inconsistent with the principle of common but differentiated responsibilities, a core argument in the wider debate over CBAM and developing countries, while simultaneously building the domestic carbon pricing and verification infrastructure that a recognition deal would require.
The table below summarizes India's July 2026 CBAM-related developments and their regulatory status.
| Date (2026) | Development | Status |
|---|---|---|
| July 3 | Draft CCTS steel-sector compliance targets announced as released for public consultation | Draft, in consultation |
| July 3 | BEE expects Indian Carbon Market trading by October 2026 | Expected, not yet trading |
| July 14 | pv magazine India: EU steel and aluminium exports down 24.4% in FY2025 | Published analysis |
| July 15 | 3rd India-EU TTC Ministerial in Brussels; 2026-27 Action Plan adopted; CBAM on the agenda | Action Plan adopted |
| Ongoing | Negotiations with EU and UK on CCTS recognition and Indian verification agencies | No agreement announced |
What happens next
Two dates decide how fast this story moves: the expected October 2026 start of Indian Carbon Market trading, and the September member state vote on the draft carbon price deduction rules that determine which foreign schemes qualify.
For Indian producers, the steel-target consultation is the entry point to the compliance market, and preparing for CBAM verification for non-EU producers pays off regardless of the recognition outcome, because verified emissions data is what lets EU customers declare actual values instead of default values. For EU importers of Indian steel and aluminium, no deduction is claimable today: budget full certificate liability for 2026 imports ahead of the February 1, 2027 certificate sales opening and the September 30, 2027 first declaration, and model the deduction as upside, not baseline. The CBAM cost calculator covers the full liability case at current certificate prices.