Indian industry has become aware of carbon emissions, says CII’s Narayan Sethuramon

The Hague: Indian industry has become aware of carbon emissions and it will be the industry’s competitiveness that would come into play when European regulations such as Carbon Border Adjustment Mechanism (CBAM) eat into margins of companies, said Narayan Sethuramon, Co Chairman, CII International Council.

“We expect the government will talk to the EU for its midsized companies to get more time (to comply with CBAM) ,” he said.

With India-EU Free Trade Agreement (FTA) likely to come into force early next year, he said that there are three categories of buyers. The first category of buyers is hesitant to buy from India but there is a message from the government to buy as India as it is a trusted partner while the second type of buyers are those looking to diversify sourcing away from China.


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“This could be under the China plus one strategy as Europe is getting wary of China and becoming interested in developing sources in India,” Sethuramon said.

The third category is of buyers who find buying from India competitive under the FTA.

He said that certain European countries including the UK, Spain, Germany, Italy and the Netherlands are huge markets for India where exports are expected to grow in the next 5-6 years with the trade deal and other countries offering increasing opportunities for growth.

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“FTA is one cog in the wheel towards 25% share of manufacturing in the gross domestic product,” he said, adding that textile, marine, defence exports, leather and advanced manufacturing will be key beneficiaries of such trade deals that India is inking with various countries and blocs including the EU.

On non tariff barriers, Sethuramon highlighted certification, testing and acceptance of testing and hoped faster Mutual Recognition Agreements between India and the 27-member EU to resolve these issues.