CBAM and India

India ranks among the world's largest producers of steel, and Indian iron, steel and aluminium flow to the European Union in substantial volume. Those two sectors sit at the heart of the EU's carbon charge at the border — the Carbon Border Adjustment Mechanism (CBAM), which prices the emissions built into imported goods the same way EU factories already pay for theirs, which places Indian exporters squarely inside the definitive phase that has been live since 1 January 2026.

CBAM has become one of the defining themes of the EU–India trade relationship, discussed at the highest level alongside the free trade negotiations. Whatever shape those talks take, one element is settled today: the importer of record for CBAM goods holds authorised declarant status in an EU Member State. Indian exporters who hold that position themselves set their own terms at the border.

What the definitive phase requires

Six sectors fall within scope today: cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. Article 25 of the CBAM Regulation provides that customs authorities allow the importation of CBAM goods by an authorised CBAM declarant, and that declarant purchases its certificates from the competent authority in the EU Member State where it is established. The status applies where cumulative annual imports exceed 50 tonnes of CBAM goods, with electricity and hydrogen counting from the first unit.

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 carry a CBAM code in the additional reference field.

From trade negotiation to boardroom decision

While governments negotiate, buyers decide. European purchasers of steel and aluminium are reorganising their supply around producers who can document embedded emissions and carry the CBAM obligation themselves. An Indian group that files its own declarations through its own EU entity offers European customers a complete, priced, compliant product — and keeps the carbon conversation, and the margin that rides on it, on its own side of the table.

What Indian exporters gain from a Dutch entity

An Indian mill selling through European buyers depends on those buyers holding authorised declarant status and passing carbon costs back through price. A producer importing through its own Dutch BV sets the terms: it purchases certificates directly at the EU carbon price, applies its own verified emissions figures, and invoices European customers as a European supplier under EU VAT rules.

On steel and aluminium volumes the Article 23 licence carries real weight. Import VAT moves to the periodic VAT return rather than falling due at customs clearance, which releases working capital on every consignment arriving in Rotterdam. The Netherlands is also a natural home for Indian business in Europe: English is the working language, and the Dutch–Indian corridor in IT, pharma and trade is decades old.

Structuring the ownership chain

The Netherlands and India maintain a double tax treaty, and the Dutch participation exemption keeps dividends and capital gains from qualifying subsidiaries flowing to the parent free of Dutch corporate tax. We map the shareholding chain before the notarial deed is drafted, so profit repatriation and the wider group structure are correct from day one.

Setting up in the Netherlands

A Dutch BV is incorporated by notarial deed and registered with the Chamber of Commerce (KvK). Incorporation runs remotely 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 entity then serves as your base for European contracts and the wider compliance agenda mapped on EU market entry.

Further reading: an EU entity for CBAM and fiscal representation and Article 23. Starting the entity itself: start from India.

Frequently asked questions

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

Importation of CBAM goods is reserved for authorised CBAM declarants, and the declarant purchases certificates from the competent authority in its EU Member State of establishment. An Indian company therefore either sells to an established EU buyer holding that status, or incorporates its own EU entity such as a Dutch BV.

Which Indian exports fall under CBAM?

Iron and steel and aluminium are the principal Indian export categories inside the mechanism, with cement, fertilisers, electricity and hydrogen completing the six sectors in scope.

Does the Netherlands have a tax treaty with India?

Yes. The Netherlands and India maintain a double tax treaty, and the Netherlands hosts a decades-old Indian business corridor in IT, pharma and trade, with English as the working language.

How fast can the Dutch route be arranged?

A Dutch BV stands within weeks through remote incorporation by power of attorney. After registration the BV obtains its VAT and EORI numbers and applies for the Article 23 licence and the CBAM authorisation.