CBAM and India: What Indian Steel and Fertiliser Exporters Must Do
India faces full CBAM exposure with no domestic carbon pricing offset. Indian steel, DRI, aluminium, and fertiliser exporters face an estimated EUR 1.7B+ in annual CBAM liability. This guide covers every step Indian exporters must take.
India CBAM Exposure by Sector
| Sector | Key companies | EU export volume | Estimated annual CBAM liability at default |
|---|---|---|---|
| Steel (BF-BOF) | Tata Steel, JSW Steel, SAIL | 1,000,000–2,000,000 t/year | EUR 143–285M |
| Steel (EAF + DRI) | JSPL, Essar Steel | 200,000–500,000 t/year | EUR 28–71M |
| Aluminium | Hindalco, NALCO | 200,000–400,000 t/year | EUR 162–324M |
| Fertilisers (Ammonia) | IFFCO, Chambal Fertilisers | 500,000–1,000,000 t/year | EUR 76–152M |
India's Grid Emission Factor
India's national grid emission factor is approximately 0.82 tCO2/MWh. Regional factors vary significantly: coal-heavy states (Chhattisgarh, Odisha) are higher; renewable-heavy states (Tamil Nadu, Rajasthan) are lower. EAF steel producers in renewable-heavy states have a significant advantage in documenting actual values.
DRI: India's Unique CBAM Exposure
India is the world's largest DRI (direct reduced iron) producer, accounting for approximately 35% of global DRI production. DRI is covered under CBAM Regulation 2023/956 Annex I (CN code 7203). Gas-based DRI achieves actual embedded carbon of 0.80–1.40 tCO2/t — significantly below the 2.18 default. For Indian DRI producers, documenting actual values saves EUR 50–88/t.
Sector-specific deep dives for India
India's CBAM Exposure at a Glance
India faces an estimated €1.5–2.5 billion in annual CBAM exposure across steel, aluminium, and fertilisers. India is the world's largest producer of direct reduced iron (DRI), which is covered under CBAM Regulation 2023/956 Annex I (CN code 7203). India does not have a national carbon tax eligible for CBAM deduction under Article 9 — the Production Linked Incentive (PLI) scheme and the Perform, Achieve and Trade (PAT) scheme provide energy efficiency credits but no direct carbon price.
Sector-by-Sector Breakdown
Steel and DRI: India's steel sector is split between BF-BOF (Tata Steel, SAIL, JSW Steel) and EAF/DRI routes (JSPL, Essar Steel). Gas-based DRI achieves actual embedded carbon of 0.80–1.40 tCO₂/t — significantly below the 2.18 EU default. For Indian DRI producers, documenting actual values saves approximately EUR 50–88 per tonne at current ETS prices. India's national grid emission factor is approximately 0.82 tCO₂/MWh, with significant regional variation. See India steel CBAM deep dive →
Aluminium: Hindalco (part of Aditya Birla Group) and Vedanta Aluminium are India's primary EU-exporting aluminium producers. India's coal-heavy grid means primary aluminium embedded carbon is typically 16–20 tCO₂/t — above the EU default of 12.40 tCO₂/t. Indian aluminium producers face above-default CBAM costs unless they can document captive renewable power. See India aluminium CBAM deep dive →
Fertilisers: IFFCO, RCF, and Chambal Fertilisers are India's major EU-exporting fertiliser producers. India uses both gas-SMR and coal-gasification ammonia routes. Gas-SMR producers can document actuals well below the EU default, while coal-gasification producers face above-default costs. See India fertilisers CBAM deep dive →
Domestic Carbon Pricing Context
India introduced GHG Emission Intensity Targets in January 2026 covering 208 additional industrial units including secondary aluminium — partly a CBAM resilience play. The PAT scheme provides energy efficiency certificates but no direct carbon price eligible for Article 9 CBAM deduction. India is developing a Carbon Credit Trading Scheme (CCTS) but it is not yet operational at the level required for CBAM deduction eligibility.
How Indian Producers Should Prepare
Indian manufacturers should prioritise engaging NABCB (National Accreditation Board for Certification Bodies) accredited ISO 14065 verification bodies. The highest-leverage action for DRI and gas-based steel producers is to document actual embedded carbon, which can reduce CBAM costs by 30–60% compared to default values. For aluminium producers, documenting captive renewable power purchase agreements (PPAs) is the most impactful intervention.
Find accredited verifiers: India CBAM Verifier Directory →
Frequently Asked Questions
Does India have a carbon price eligible for CBAM deduction?
No. India does not have a national carbon tax eligible for CBAM deduction. The PAT scheme provides energy efficiency certificates but no direct carbon price.
What is India's total annual CBAM exposure?
India's total annual CBAM exposure is estimated at EUR 1.7B+ across steel, aluminium, fertilisers, and DRI — based on current export volumes and EU default values.
Which Indian steel companies face the highest CBAM exposure?
Tata Steel, JSW Steel, SAIL, and JSPL are India's major EU steel exporters. All face full CBAM exposure with no domestic carbon pricing offset.
Does CBAM apply to Indian DRI exports?
Yes. DRI is covered under CBAM Regulation 2023/956 Annex I (CN code 7203). India is the world's largest DRI producer and a significant DRI exporter to the EU.
Where can Indian manufacturers find ISO 14065 accredited CBAM verifiers?
See the India verifier directory at /verification-directory/india/ for NABCB ISO 14065 accredited CBAM verification firms.
Calculate your CBAM saving → · Find a verifier → · What is embedded carbon? →