India-EU trade deal text falls short on recognising local CBAM accreditors

Earlier, the expectation was that the final text will recognise India’s independent accreditation process for CBAM.

This would imply an extra compliance measure for Indian exporters to align with accreditation bodies recognised both by India and the EU.

Though there are no National Accreditation Board for Certification Bodies or NABCB-accredited Indian agencies recognised under EU regulations, there are certain validation and verification bodies in India for the EU’s CBAM scheme based on accreditation granted by other accreditation bodies.

The NABCB is the National Accreditation Board for Certification Bodies that provides accreditation to inspection, certification, validation and verification bodies on assessment of their competence as per the Board’s criteria and in line with international standards and guidelines.

However, the text said that the EU shall “endeavour to support” India’s greenhouse gas emission reduction efforts, in particular through the mobilisation of financial resources, tools, instruments and related investments, as appropriate. The use of the “endeavour” means that the EU will only try to support Indian efforts, but is not bound to do so.

Scope for cooperation

The text said India will also engage in technical exchanges with the 27-nation bloc on the implementation of carbon border adjustment measures, including their product scope and embedded emissions coverage; monitoring, reporting and verification processes.

The deal also incorporates the clause for India and the EU to take into account the carbon price effectively paid in the other party under a carbon emissions reduction scheme, calculated on

greenhouse gases covered by such a measure and released during the production of goods; exchanges of information and technical data

to facilitate the establishment of default values under carbon border adjustment measures.

The carbon tax ensures that imported carbon-intensive goods into the EU bear a cost starting January 2026, and is seen by several developing nations as discriminatory and in conflict with international environmental law.

Brazil, China, India and South Africa have raised serious concerns about CBAM at forums of the WTO, and Russia initiated a formal dispute on May 12 last year.

Forward MFN clause

The Indian industry, however, stands to gain from the MFN clause in the India-EU deal on the CBAM measures.

It will help the Indian industry receive the same concessions that the EU has promised the US under their trade deal signed earlier last year, a senior government official said.

As per the annexure on ‘most favoured nation treatment’ in the chapter on good regulatory practices of the India-EU deal, the text stated that for carbon border adjustment measures, “the Parties (India and the EU) shall apply no less favourable conditions to the other Party’s goods than those applied to like goods from other third countries as regards any flexibilities granted in the implementation of their carbon border adjustment measures.”

In the EU-US trade deal joint statement released in August last year, the EU had said, “Taking note of the US concerns related to treatment of US small and medium-sized businesses under CBAM, the European Commission, in addition to the recently agreed increase of the de minimis exception, commits to work to provide additional flexibilities in the CBAM implementation.”