CBAM rules strain India’s steel MSMEs

At least 10 consignments held at European ports this month; order cancellations on the rise

- SAKET KUMAR

India’s small steel exporters are reporting the first wave of shipment seizures at European ports and order cancellations due to missing compliance reports, marking the most serious disruption yet for the country’s steel micro, small and medium enterprises (MSMEs) since the European Union’s (EU’s) Carbon Border Adjustment Mechanism (CBAM) entered its payment phase on January 1.

India was unable to secure any concession on CBAM in the free trade agreement signed with the EU on January 27.

CBAM is the EU’s tool to impose a “fair price” on carbon embedded in carbon-intensive goods — such as steel, cement, and aluminium — entering the bloc. It is mandatory for imports exceeding 50 tonnes per calendar year.

According to Nilesh Bhattad, founder of CleanCarbon.ai, which has generated around 8,000 CBAM compliance reports for smaller exporters, at least 10 Indian consignments have already been held at European ports this month for missing or incomplete carbon declarations. One shipment from a Mumbai-based tractor manufacturer was stuck in a Polish port, accruing heavy detention charges.