The European Union is set to expand its Carbon Border Adjustment Mechanism (CBAM), potentially raising carbon tax costs for Indian exporters significantly. According to the Global Trade Research Initiative (GTRI), this expansion could affect a broad range of manufactured goods, including fabricated metal products, machinery parts, and auto components, starting January 1, 2028. Currently, CBAM applies to imports of iron and steel, aluminium, cement, and other selected products. The proposed changes will require Indian exporters to enhance their emissions accounting and invest in decarbonisation to remain competitive in the European market. GTRI Founder Ajay Srivastava emphasized that the changes would transform CBAM from a tax primarily on raw materials into a broader carbon tax affecting many industrial goods. This shift indicates a deeper integration of environmental considerations into trade policies, potentially impacting the competitiveness of Indian exports in one of their key markets.