EU’s Carbon Border Adjustment Mechanism (CBAM): Navigating Green Protectionism in Indian Exports

This development highlights a complex facet of modern globalization: the emergence of non-tariff barriers disguised as environmental standards. While the EU frames CBAM as a climate action tool, developing nations like India view it as a form of 'green protectionism' that ignores the principle of Common But Differentiated Responsibilities (CBDR) enshrined in the Paris Agreement. It places an undue financial burden on developing economies that are still in the process of industrializing and lack the capital for immediate large-scale technological overhauls. To mitigate these effects, the Indian government and industry must accelerate the transition to 'Green Steel' and renewable energy. Policy interventions such as the Carbon Credit Trading Scheme (CCTS) and the National Green Hydrogen Mission are steps in the right direction. Furthermore, India is actively engaging in bilateral negotiations and raising concerns at the World Trade Organization (WTO) regarding the compatibility of CBAM with global trade rules. UPSC Relevance: This topic is crucial for understanding the intersection of international relations, environmental policy, and economic geography. It serves as a prime example for questions on the 'effects of globalization on Indian society' and the 'impact of policies of developed countries on India’s interests.' Aspirants should use this to discuss the challenges of balancing industrial growth with climate commitments and the evolving nature of global trade diplomacy.