Recognising Local CBAM Accreditors
Context:
The recently concluded trade deal between India and the European Union (EU) has brought the Carbon Border Adjustment Mechanism (CBAM) into focus.
While the deal includes a 'most favoured nation' (MFN) clause, it stops short of immediately recognising independent Indian accreditation bodies, a move that could have provided instant relief to Indian exporters.
Background on CBAM:
CBAM mandates that imported carbon-intensive goods into the EU bear a cost starting January 2026.
Several developing nations, including Brazil, China, India, and South Africa, view this as discriminatory and potentially in conflict with international environmental law.
Russia even initiated a formal dispute at the WTO on May 12 last year regarding these measures
Key Provisions of the Deal:
The text of the deal, released on 27th February 2026, states that India and the EU can engage in a "technical dialogue" regarding the mutual recognition of accreditation bodies.
This is specifically for verifying compliance with CBAM measures.
Contrary to earlier expectations, the final text does not recognise India's independent accreditation process for CBAM.
Currently, there are no agencies accredited by the National Accreditation Board for Certification Bodies (NABCB) that are recognised under EU regulations.
This implies an extra compliance burden for Indian exporters, who must now align with accreditation bodies recognised by both India and the EU.
While some validation bodies in India exist for the EU's CBAM scheme, they operate based on accreditation granted by other bodies, not the NABCB.
National Accreditation Board for Certification Bodies (NABCB):
The NABCB is the National Accreditation Board for Certification Bodies that provides accreditation to inspection, certification, validation and verification bodies on assessment of their competence as per the Board's criteria and in line with international standards and guidelines.
The MFN Clause Benefit:
Despite the lack of immediate recognition for local accreditors, the Indian industry stands to gain from the Most Favoured Nation (MFN) clause included in the deal’s chapter on good regulatory practices.
The clause ensures that India receives "no less favourable conditions" than those applied to goods from other third countries regarding any flexibilities granted in implementing CBAM measures.
This will help Indian industry receive the same concessions the EU promised the US.
For instance, in an EU-US joint statement from August last year, the EU committed to working on additional flexibilities for US small and medium-sized businesses.