India’s nascent carbon market is rapidly moving beyond a domestic emissions-compliance mechanism to become a trade and industrial competitiveness tool, as the government begins integrating carbon pricing into its trade strategy and overseas markets start recognising costs paid under the country’s Carbon Credit Trading Scheme (CCTS). The shift could have direct consequences for Indian exporters. The UK has recognised India’s CCTS among carbon-pricing mechanisms that can qualify for relief under its Carbon Border Adjustment Mechanism (CBAM), which will apply from January 1, 2027, to specified imports, including iron and steel, aluminium, cement, fertilisers and hydrogen.