The European Union’s Carbon Border Adjustment Mechanism (CBAM) and the United States’ green industry subsidies are creating fresh challenges for exporters from developing economies, particularly India. Sectors such as steel, aluminium and clean-energy manufacturing could face higher costs and reduced competitiveness in global markets, raising concerns about the impact on jobs, investment and industrial growth.
The article argues that India should move beyond opposing such measures and lead efforts to build a new global framework linking climate and trade governance. It suggests creating mechanisms that account for developing countries’ capabilities, promote technology access and ensure fair climate finance, while also strengthening India’s domestic carbon market to enhance its credibility in international negotiations.