India-EU Free Trade Deal Includes CBAM Provisions and Anticipated Trade Boost

India and the European Union are finalising a free trade agreement that contains a dedicated annex to address the EU’s Carbon Border Adjustment Mechanism (CBAM). Senior Commerce official Darpan Jain said the pact offers flexibility for Indian SMEs, mechanisms to engage with EU authorities on carbon pricing, and ways to offset Indian carbon costs against EU charges.

German Ambassador to India Philipp Ackermann called the forthcoming agreement a “game changer,” highlighting tariff cuts, removal of trade barriers, and expected increases in German investment in India and vice‑versa. He noted the deal should diversify Indian exports—shifting an estimated $10‑11 billion from the United States to the EU—and stimulate cross‑border commerce and people‑to‑people links once it is implemented in the first half of next year.