Expressing his worry on behalf of the MSME sector, President of All India Association Industries Dr. Vijay Kalantri said, this is a rather harsh step by the European Union to restrict imports. He further said this additional Carbon Tax of 25 – 30% that will be imposed from 1st January 2026, will substantially affect exports from large and traditional trade partners like India. He urges upon the Government of India to take up this issue at the highest level with our EU counterparts and find a solution at the earliest.
CBAM will be implemented in two parts. Part one is Advance Data sharing by exporters from 1 st October 2023. Part two is imposition of Tax from 1st January 2026. This means the exporters have to furnish elaborate and sensitive data in advance to the EU before exports begin. This is a challenge that the industry will face heavily. This burden will be felt harder particularly by the MSME, SME exporters as they procure goods from large sector. They need to obtain sensitive production and emission data from their large sector suppliers that may be difficult or impossible. This new compliance will add up the cost of exports by at least 10% over and above the CBAM tax at the port of import. Obviously, the overall exports will not be competitive. India must stiffly resist this move with counter measures.
