CBAM and India

India is one of the world's largest steel producers. Indian producers ship large volumes of iron, steel and aluminium to the European Union. Both sectors are central to the EU's carbon charge at the border, the Carbon Border Adjustment Mechanism (CBAM). Under CBAM, the importer pays for the emissions from producing the imported goods. EU factories already pay for their own emissions in the same way. This means Indian exporters are covered by the definitive phase, which has applied since 1 January 2026.

The EU and India concluded their trade talks on 27 January 2026 (European Commission, 2026). CBAM covers goods made outside the European Economic Area and Switzerland, so Indian goods fall under CBAM on the same terms as goods from other countries (business.gov.nl, 2026). One rule is therefore fixed. The importer of record for CBAM goods has authorised declarant status in an EU Member State. If your own EU company has that status, you set your own terms.

The rules in the definitive phase

Six sectors fall within scope today: cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. Under Article 25 of the CBAM Regulation, customs authorities only allow an authorised CBAM declarant to import CBAM goods. The declarant buys its certificates from the competent authority in the EU Member State where it is established. An importer needs this status when it imports more than 50 tonnes of CBAM goods a year. For electricity and hydrogen, the status is needed from the first unit. An importer from outside the EU can also work through an indirect customs representative with authorised CBAM declarant status, who is then always the declarant.

The first annual declaration covers calendar year 2026 and falls due by 30 September 2027. Certificate sales open on 1 February 2027 through the common central platform. Since 1 January 2026, EU import declarations have a CBAM code in the additional reference field. All 2027 dates, including the first quarterly certificate check on 31 March 2027, are in our guide to the authorised CBAM declarant for non-EU exporters.

Verified emissions and the CBAM bill

CBAM applies to Indian steel and aluminium on the same terms as to goods from other countries. Verified emissions data usually gives a lower bill than the default values. For steel and aluminium, these default values include a mark-up of 10% in 2026, 20% in 2027 and 30% from 2028 (Implementing Regulation (EU) 2026/1740).

To see that mark-up in euros, enter your steel or aluminium tonnes in the CBAM cost calculator for India. It gives the certificate cost for each year, with the mark-up of that year.

Your group can file its own declarations through its own EU company, with verified data from its own plants. European customers then get a product with the CBAM costs already in the price. You also handle the talks about carbon costs yourself, and you keep the margin on them.

Benefits of a Dutch entity for Indian exporters

If your mill sells through European buyers, you depend on them. They need authorised declarant status, and they pass the carbon costs back to you in their price. If you import through your own Dutch BV, you set the terms. Your BV buys certificates directly at the EU carbon price and uses your own verified emissions figures. It invoices European customers as a European supplier under EU VAT rules.

For large volumes of steel and aluminium, the Article 23 licence is very useful. With this licence, your BV declares the import VAT later, in its periodic VAT return. Your company then keeps more cash for every shipment you import through Rotterdam. The Netherlands is also a good base for Indian companies in Europe. English is the working language, and Dutch and Indian companies have worked together in IT, pharma and trade for decades.

Structuring the ownership chain

The Netherlands and India have a double tax treaty. Under the Dutch participation exemption, dividends and capital gains from qualifying subsidiaries are free of Dutch corporate tax for the parent company. Before the notary drafts the deed, you plan the shareholding chain with us. The group structure and the payment of profits to your parent company are then correct from the date of incorporation.

Setting up in the Netherlands

A Dutch BV is incorporated by notarial deed and registered with the Chamber of Commerce (KvK). Incorporation is done from abroad by power of attorney, with the parent company holding the shares. After registration the BV obtains its VAT number and EORI number and applies for the Article 23 licence and the CBAM authorisation. The same BV is then also your base for European contracts and other EU compliance duties. You can read more about these duties on the EU market entry page.

Further reading: an EU entity for CBAM, the EU-India trade agreement and fiscal representation and Article 23. For the incorporation itself, see starting a Dutch BV from India.

Frequently asked questions

Can an Indian company import CBAM goods into the EU directly?

Only an authorised CBAM declarant may import CBAM goods. The declarant buys its certificates from the competent authority in the EU Member State where it is established. An Indian company therefore has three options. It can sell to an EU buyer with this status. It can import through an indirect customs representative with authorised CBAM declarant status, who is then always the declarant. It can also set up its own EU company, such as a Dutch BV.

Which Indian exports fall under CBAM?

CBAM has six sectors in scope. Iron and steel and aluminium are the main Indian exports among them. The other sectors are cement, fertilisers, electricity and hydrogen.

Does the Netherlands have a tax treaty with India?

Yes. The Netherlands and India have a double tax treaty. Dutch and Indian companies have worked together in IT, pharma and trade for decades, and English is the working language.

How fast can a Dutch BV be set up?

A Dutch BV is set up remotely by power of attorney, usually within one week once all documents are complete. After registration the BV obtains its VAT and EORI numbers and applies for the Article 23 licence and the CBAM authorisation.