India is expanding financial assistance for exporters dealing with the European Union’s Carbon Border Adjustment Mechanism (CBAM), with Commerce and Industry Minister Piyush Goyal announcing plans to cover the full cost of international certification for micro and small enterprises. The package also includes graduated support for larger businesses and work aimed at building domestic verification capacity. Goyal made the announcement during a visit to Berlin on 23 October.
Speaking in Berlin, Goyal said the government is prepared to finance certification expenses for smaller exporters through its Export Promotion Mission. The government is also assessing options to develop verification capacity in India, which could reduce spending on emissions documentation and compliance with European environmental requirements. The measures are intended to address administrative and technical costs faced by Indian manufacturers supplying the EU.
Exporters supplying covered goods must collect emissions data, arrange independent verification, and provide documentation that meets European requirements. The costs extend beyond carbon-related charges tied to covered imports, affecting producers of steel, aluminium and other industrial products. Compliance obligations therefore involve both technical work and documentation aligned with EU expectations.
Export Promotion Mission and TRACE reimbursement rules
The CBAM support initiative is built on the Export Promotion Mission approved in November 2025, with funding equivalent to about €2.36 billion over six financial years. The programme combines export financing, market-access assistance, international certification support, and measures designed to improve business competitiveness. A central element is the Trade Regulations, Accreditation and Compliance Enablement programme (TRACE), introduced in February 2026 and expanded in July.
Revised rules issued by India’s Directorate General of Foreign Trade on 1 July 2026 set reimbursement rates for eligible firms. Micro and small enterprises can receive reimbursement of up to 95% of qualifying certification and compliance expenditure, while medium-sized businesses can receive up to 80%. The standard annual reimbursement ceiling is equivalent to approximately €47,000 per exporter identification code per financial year.
The revised rates replaced original February 2026 levels of 60–75%. Eligible spending includes testing, inspection, certification, and conformity-assessment services. Reimbursements are paid in two stages, with the second instalment linked to exports associated with the relevant certification.
Goyal’s latest commitment to finance 100% of certification costs for smaller exporters would exceed the existing 95% reimbursement ceiling. However, revised implementing rules confirming an automatic entitlement to full reimbursement have not been established. As a result, the announcement is described as a policy commitment rather than a confirmed change to the existing framework.
CBAM scope for steel and aluminium
The EU’s CBAM entered its definitive phase on 1 January 2026, covering specified imports of iron and steel, aluminium, cement, fertilisers, electricity and hydrogen. The mechanism is designed to align the carbon cost of covered imports with costs faced by European producers under the EU Emissions Trading System (EU ETS). For Indian exporters, exposure depends on how emissions are calculated and verified under applicable methodologies.
For Indian steelmakers, exposure depends on production technology, fuel consumption, emissions intensity, and availability of independently verified installation-level data. Integrated plants using coal-intensive blast-furnace production generally face greater carbon exposure than less emissions-intensive facilities. Actual liabilities still depend on product methodology, benchmarks, and verified emissions.
Aluminium producers face different considerations linked to electricity prices and emissions intensity of production. Under current CBAM calculations for aluminium, specified emissions categories are covered rather than automatically pricing every indirect emission associated with electricity consumption. This distinction affects producers evaluating renewable electricity contracts and investments in cleaner power supplies.
Fastmarkets published product-specific modelling in October 2026 estimating an indicative CBAM cost of €277.60 per tonne for Indian hot-rolled coil produced through the blast-furnace/basic-oxygen-furnace route using default values and third-quarter carbon pricing. For one category of unwrought, unalloyed aluminium, a corresponding Indian default-value scenario was estimated at approximately €55.12 per tonne.
The estimates do not represent universal CBAM charges for Indian steel and aluminium. Actual liabilities can differ where verified installation emissions replace default values or where other adjustments apply. Even when emissions documentation is fully subsidised, carbon-related costs borne by European importers may remain and be passed back through commercial contracts.
Domestic preparation versus EU-accredited verification
India’s plan to develop domestic verification capacity aims to reduce reliance on external technical advisers and overseas inspection services. Indian engineering companies, testing laboratories and emissions specialists could take a larger role in collecting production data, establishing monitoring procedures, reviewing emissions calculations, and preparing facilities for independent verification. The approach distinguishes between technical preparation work and statutory verification requirements.
The regulatory separation remains critical under the European Commission’s CBAM accreditation framework. Mandatory verification must be performed by verifiers accredited through relevant EU national accreditation bodies. Companies outside Europe may seek accreditation themselves, but approval from Indian authorities alone does not satisfy the EU requirement.
Verification reports must also comply with prescribed European procedures and Registry requirements. As a result, domestic Indian organisations can provide technical preparation and pre-verification services while statutory CBAM verification remains subject to applicable European accreditation rules. Manufacturers seeking to rely on actual emissions data instead of default values need coordination between these service categories.
The source material states that local certification or technical approval cannot substitute for mandatory EU-accredited verification. Whether specific CBAM verification services qualify for support will depend on applicable eligibility lists and programme conditions under India’s reimbursement framework.
CBAM alongside India-EU free trade talks
The compliance initiative coincides with developments in bilateral trade relations between India and the EU. The two sides concluded negotiations on a free trade agreement in January 2026, while the European Commission submitted proposals for signature and conclusion in September; the agreement has not yet entered into force. Bilateral merchandise trade reached approximately €118 billion in 2025.
The proposed trade agreement and CBAM address different regulatory areas. A free trade agreement changes market-access conditions and tariffs, while CBAM imposes carbon-related obligations on specified imported goods under EU legislation. Indian exporters could benefit from improved tariff treatment while continuing to face emissions-reporting, verification, and certificate-related commercial exposure.
The additional costs associated with CBAM can affect benefits gained through customs access for manufacturers operating on narrow margins. Suppliers may still secure more favourable tariff conditions but lose part of their commercial advantage due to high default emissions values or insufficient verification evidence used by European buyers when applying carbon-cost adjustments.
Payment timing and compliance cost coverage
The support programme is intended to ease compliance pressures on smaller exporters by reducing costs related to establishing emissions-accounting systems and certification arrangements. Such firms often lack dedicated teams to monitor emissions across production processes as well as energy inputs and material supply chains used in manufacturing.
The material states that subsidised compliance preparation could improve consistency of emissions records used for contracts requiring independently verified information. Larger industrial groups could also benefit if an expanded domestic technical-services market reduces expenditure connected to verification activities carried out under EU accreditation rules.
The practical impact depends on implementation details including guidance on eligible services, documentation standards, reimbursement conditions, and cooperation between Indian service providers and EU-accredited verifiers. Payment timing is another factor because exporters may need to finance certification expenditure before receiving reimbursement under TRACE-linked arrangements.
This creates a distinction between reimbursable compliance costs under programme rules and potentially larger financing needs tied to carbon liabilities, industrial investment requirements, or contractual price adjustments made with buyers in Europe. Government support for emissions verification alone does not provide capital required to modernise production equipment or reduce fossil-fuel consumption or secure cleaner energy supplies.
Industrial investment priorities under CBAM-linked reporting
The initiative could reduce administrative costs for meeting European requirements compared with competing export origins including Turkey and China mentioned in the source material. Longer-term commercial impact is described as depending on whether compliance assistance aligns with measurable reductions in industrial emissions affecting future reporting obligations under CBAM rules.
For steelmakers cited areas of investment include energy efficiency improvements, lower-emission production technologies, material recovery measures, and alternative production routes referenced in the source material. For aluminium manufacturers process improvements and energy procurement remain important for competitiveness even where current CBAM rules treat electricity-related emissions differently from other categories covered under aluminium calculations.
The source material notes that European importers assess suppliers based on production costs, delivered prices, verified emissions information, contractual reliability, and exposure to carbon-adjustment liabilities applied under EU requirements. India’s government seeks to improve exporters’ position by reducing expenses associated with preparing documentation required for meeting those European requirements.
The approach described focuses on reducing certification-related administrative expenditure while addressing compliance obligations connected to CBAM reporting processes rather than directly replacing efforts aimed at lowering carbon intensity of production under the EU mechanism.