As the Carbon Border Adjustment Mechanism (CBAM) has already impacted India, the country is now closely monitoring an additional EU directive aimed at mitigating the effects of these violations on importers' businesses. The Corporate Sustainable Due Diligence Directive, currently in the draft stage, has caught the attention of Indian officials, as it has the potential to affect India's exporters and micro, small, and medium enterprises (MSMEs). Given that India's exports to the EU in 2022-23 amounted to $74.8 billion, with key products including mineral fuels, electrical machinery, and iron and steel, this legislation holds great significance.

India is studying the law, particularly its application to sectors such as textiles, agriculture, and mineral extraction. The timing of this development is crucial, as India and the EU are currently negotiating a free trade agreement.

While the CBAM is scheduled to be implemented in October this year as a global carbon tax on imports to the EU, the due diligence directive is still under development. This story highlights the potential impact of these regulations on India's exporters and MSMEs. Further, it encourages a deeper understanding of the evolving landscape of environmental governance and international trade. Read More!