Examine the implications of the EU's Carbon Border Adjustment Mechanism (CBAM) for India's export competitiveness and climate diplomacy. How can India respond through multilateral platforms like BRICS?

The EU's Carbon Border Adjustment Mechanism entered its definitive phase on 1 January 2026, obliging importers to surrender certificates for emissions embedded in iron & steel, aluminium, cement, fertilisers, electricity and hydrogen [1]. For India it is simultaneously a trade-cost shock and a test of climate equity.

Implications for export competitiveness

• Cost pass-through: certificate prices linked to EU carbon pricing raise the landed cost of Indian goods, with steel exports the most exposed segment [2].
• Emissions intensity gap: India's covered sectors are largely coal-dependent, so embedded emissions per tonne are higher, magnifying the levy relative to competitors.
• Compliance burden: measurement, reporting and verification of embedded emissions and "authorised declarant" formalities [1] fall on exporters, hitting MSMEs hardest.
• Functions as a non-tariff barrier, raising unsettled questions of consistency with WTO's MFN and national-treatment obligations.

Implications for climate diplomacy

• Unilateralism versus CBDR-RC: a uniform border carbon price overrides the differentiated-responsibility principle of the UNFCCC-Paris framework.
• It shifts transition costs onto developing countries while promised finance lags; BRICS Environment Ministers at New Delhi (August 2026) termed such measures "unilateral, punitive, discriminatory and protectionist" and urged developed nations to honour climate-finance commitments [2].
• Risks becoming a template replicated by other blocs, eroding trust in the multilateral climate process.
• Equally, it gives India leverage to press harder for finance and technology transfer.

India's response through BRICS and other platforms

• Leverage India's 2026 BRICS chairship [3] to consolidate a common negotiating position, as at Brasilia (2025) where India rallied BRICS behind the Baku-to-Belem Roadmap for USD 1.3 trillion in climate finance [4].
• Seek mutual recognition of India's domestic carbon market so carbon revenue is retained domestically.
• Raise the issue in the WTO Committee on Trade and Environment, keeping collective dispute options open.
• Pair this with accelerated green-steel and decarbonisation efforts, plus MRV handholding for MSMEs.

CBAM is less a tariff than a contest over who bears the cost of transition. India's optimal path blends principled resistance with domestic reform — collective BRICS diplomacy anchored in CBDR-RC and equity, alongside faster industrial decarbonisation — so that climate ambition and export competitiveness advance together.