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The Government of the United Kingdom has included India's Carbon Credit Trading Scheme (CCTS) in its indicative list of qualifying carbon pricing mechanisms under the UK's Carbon Border Adjustment Mechanism (CBAM), Commerce Ministry sources told ANI.

In a communication addressed to the Bureau of Energy Efficiency, Ministry of Power, HM Treasury confirmed that the CCTS has been included in the UK's published indicative list of overseas carbon pricing schemes, having been assessed as meeting the qualifying criteria under Part 3, Regulation 6 of the Carbon Border Adjustment Mechanism (Calculation of CBAM Rate and Determination of Carbon Price Relief) Regulations 2026.

Impact on Indian Exporters

With this recognition, UK importers of eligible Indian goods covered under CBAM will be able to seek carbon price relief corresponding to the effective carbon price borne by those goods under the CCTS, subject to satisfying evidence and verification requirements prescribed under UK law. This is expected to reduce the effective CBAM liability on Indian goods, directly benefiting Indian exporters to the UK.

The recognition follows sustained technical-level engagement between the Ministry of Commerce and its UK counterpart on the design and implementation of the CCTS. Sources in the Commerce Ministry said that the move reflects the UK CBAM's core principle of avoiding double taxation on goods that have already borne an eligible carbon price in their country of origin.

Continued UK-India Cooperation

According to Commerce Ministry sources, cooperation on carbon market design and implementation will continue going forward through the UK-India Energy Memorandum of Understanding and the Partnership for Market Implementation. Both governments have also committed to continued dialogue on carbon pricing, including on the interaction between the CCTS and UK CBAM rules, further strengthening India-UK engagement on climate and trade issues. (ANI)