CBAM, EUDR trade protection measures in garb of of climate, environment: Economic Survey

The EU’s Carbon Border Adjustment Mechanism (CBAM) and European Union Deforestation Regulation (EUDR) are trade protection measures garbed in the language of climate and environment, the Economic Survey for 2024-25 cautioned, adding that countries like India face the twin challenge of achieving higher levels of economic development and dealing with climate change mitigation and adaptation. It highlighted that today’s developed countries do not conform to the standards that they expect from developing countries at a similar stage of development.

The CBAM and EUDR are expected to affect $9.5 billion of India’s exports to the EU, which amounts to 9% of India’s exports to the world or 12.9% of India’s exports to the bloc, it said, citing a study by think tank GTRI.

“In short, it is hard to shake off the conclusion that both CBAM and EUDR are trade protection measures garbed in the language of climate and environment. The game and the end goals are the same, but the tactics keep changing. Labour standards, gender, democracy, emissions and deforestation, the innovative list will keep evolving with time,” it said.


The EU’s CBAM is expected to translate into a 20-35% tax on select imports into the EU from January 1, 2026. From that date, EU importers will have to declare and purchase CBAM certificates to cover the emissions associated with producing imported steel products. It will impact the cement, iron and steel, aluminium, fertiliser, electricity and hydrogen sectors. New Delhi has strongly criticised the move and is in dialogue with the EU on the issue.

The EUDR seeks to prevent the import of specified goods contributing to deforestation and forest degradation in the bloc. It covers coffee, leather, oil cake, wood furniture, paper, and paperboard.