The EU’s CBAM from January 2026 will tax carbon-intensive Indian exports, citing carbon leakage. India sees it as protectionist and against CBDR, hurting MSMEs. India plans a WTO challenge while building a domestic carbon market to retain revenue and drive its green transition.
Click to View MoreIndia’s carbon credit market, guided by the Carbon Credit Trading Scheme (CCTS) 2023, aims to accelerate the country’s transition toward a low-carbon economy and meet its Net Zero 2070 goal. The market allows entities to trade verified emission reductions through renewable energy, afforestation, and sustainable farming projects. However, challenges such as weak verification systems, limited domestic demand, inequitable benefit-sharing, and risks of land displacement persist. Strengthening monitoring, reporting, and verification (MRV), ensuring community participation, and improving regulatory transparency are essential for building a fair, credible, and effective carbon market that supports inclusive climate action.
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