India and the European Union (EU) plan to sign the FTA on January 27. The EU is the second largest destination in India for engineering products, accounting for 17 percent of the total volume of engineering products shipped from the country, with exports to the EU estimated at $118 billion in 2024-25.
As part of the adjustment of the EU carbon borders, importers must declare the carbon emissions contained in these products. While exporters can provide actual, verified emission data, the EU applies default emission values when such data is unavailable or unverifiable.
"These default values are set intentionally high, above typical actual emissions, which can result in CBAM costs of €400-500 per tonne, compared to €250-400 per tonne if verified emission data is used, depending on the product. Inflated default values increase the cost of carbon imports, making Indian exports significantly more expensive in the EU market and indirectly subsidizing European producers," EEPC Chairman Pankaj Chadha said in a statement.
