Carbon Border Adjustment Mechanism (CBAM)

EVOLVING GLOBAL TRADE PACTS: CHALLENGES AND WAY FORWARD FOR INDIA

Modern trade pacts now set rules on environment, labour, and digital commerce, not just tariffs. Deals like the India–EFTA TEPA expand market access and investment, but raise compliance costs for MSMEs. Measures such as the EU’s CBAM risk protectionism, challenging India’s policy autonomy.

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EU’S REGULATORY REGIME IS INDIA’S BIGGEST CHALLENGE

The India–EU FTA promises tariff gains but faces stiff non-tariff barriers like CBAM, EUDR, and CSDDD, raising compliance costs for Indian exporters, especially MSMEs. To prevent green protectionism from eroding benefits, India must push mutual recognition, strengthen domestic capacity, and build global coalitions for a fair partnership.

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India-EU FTA Explained: Opportunities, Challenges like CBAM, and the Way Forward

India and the EU have concluded the BTIA, creating a two-billion-people market. By cutting tariffs and opening services, it boosts Indian exports, global value-chain integration, and IMEC. Despite CBAM and ratification hurdles, it marks a historic strategic and economic compact.

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