HOME > MARKETS > ECONOMY NEWS
  ECONOMY NEWS
ECONOMY
UK recognizes India's Carbon Credit Trading Scheme under carbon tax mechanism
Sep-08-2026

In a significant relief to Indian exporters, the UK has recognised India's Carbon Credit Trading Scheme (CCTS) as a qualifying criterion for pricing relief under its carbon border adjustment mechanism (CBAM). The move is expected to lower the carbon-related tax burden on Indian goods exported to the UK. India’s CCTS aims to reduce, remove and avoid greenhouse gas emissions from the Indian economy by pricing such emissions through the trading of Carbon Credit Certificates. The Bureau of Energy Efficiency will meet the financial support required to implement the CCTS through fees and charges collected from entities under the scheme and along with its own resources. 

The UK government has included the scheme in its indicative list as a qualifying carbon pricing mechanism under Britain's CBAM. Under the 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 the evidence and verification requirements prescribed under UK law. This will reduce the effective CBAM liability on Indian goods, directly benefiting Indian exporters to the UK.

The recognition follows sustained technical-level engagement between India and the UK on the design and implementation of the CCTS. The recognition 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. Going forward, cooperation on carbon market design and implementation will continue through the UK-India Energy Memorandum of Understanding and the Partnership for Market Implementation. The two governments are also committed to continued dialogue on carbon pricing, including on the interaction between the CCTS and UK CBAM rules, further strengthening India-UK engagement. The move is important as the commerce ministry was pursuing the matter with the UK for long.
  RELATED NEWS >>
Most Viewed >>
EXPLORE
© CITRUS INTERACTIVE
Designed & Developed Accord Fintech Pvt. Ltd.