Business · India Bureau
UK grants carbon credit recognition for Indian exports under CBAM
British importers can now claim relief on carbon costs for eligible goods from India, recognizing credits paid under the domestic Carbon Credit Trading Scheme. The development removes the risk of double taxation on Indian exports entering UK markets.
LSN India ·
The United Kingdom has formally recognized India's Carbon Credit Trading Scheme (CCTS) under its Carbon Border Adjustment Mechanism (CBAM), allowing UK importers to claim relief on carbon pricing for Indian goods. The move represents a significant step in aligning carbon pricing frameworks between the two nations and ensures Indian exporters do not face punitive double taxation on their shipments.
Under the arrangement, UK importers of eligible Indian products can offset carbon costs already paid under India's domestic CCTS against their CBAM obligations. This recognition acknowledges that Indian companies have already incurred carbon pricing expenses through the national trading scheme, preventing them from being charged again upon entry into British markets.
The decision comes as the UK continues to expand recognition of comparable carbon pricing mechanisms globally. The move is expected to ease compliance burdens for Indian exporters while maintaining the integrity of the UK's carbon border adjustment framework. Both nations have signaled their commitment to supporting climate action while enabling fair and efficient trade practices.
India's CCTS, a domestic carbon pricing mechanism, has become increasingly important for Indian industries seeking to demonstrate carbon compliance credentials in international markets. The UK recognition enhances the scheme's credibility and provides tangible benefits for Indian exporters across various sectors.