Climate
Are India’s FTAs Becoming Climate Policy by Default? The CBAM Challenge
The climate impact of FTAs is reshaping India’s trade strategy as EU carbon rules like CBAM alter market access and industrial competitiveness.
The climate impact of FTAs is becoming a defining issue for India’s trade negotiations, as carbon-linked rules like the EU’s CBAM increasingly shape market access and industrial competitiveness.
As India accelerates negotiations on free trade agreements (FTAs) with the European Union, United Kingdom, EFTA countries and the United States, a parallel transformation is unfolding — one where trade policy is increasingly shaped by climate-linked conditions.
A recent policy discussion summarised in India’s FTAs: Trade, Climate and Strategic Choices, organised by Climate Trends, argues that the EU’s Carbon Border Adjustment Mechanism (CBAM) represents not a marginal environmental tool, but a structural shift in global trade governance. The deeper question is whether India’s trade engagements are effectively becoming instruments of climate policy — and if so, under whose terms.
CBAM: From Environmental Tool to Structural Trade Instrument
Ajay Srivastava, Founder and CEO of GTRI, cautioned against viewing CBAM as a narrow carbon levy limited to a handful of sectors. While the current scope covers steel, aluminium, cement, fertilisers, hydrogen and electricity, the EU has stated its intention to expand the mechanism to all industrial products by 2033.
“What most people ignore about CBAM is that it will not only hurt six products,” Srivastava said. “After a few years when CBAM is in full form, then the normal CBAM liability on exports will range anywhere between 20% to 35%, and even 50% or more for products like aluminium.”
India’s average applied tariffs into the EU are currently around 3–3.5%. CBAM, by contrast, could impose carbon-linked charges many times higher. “Instead of 3% custom duties… exporters may pay 20%-40% under CBAM. And in return, all EU goods will be entering India at zero tariffs. Such a deal appears asymmetric,” he added.
From this perspective, CBAM is less a climate safeguard and more a structural replacement of tariffs with carbon-linked entry costs — one that sits outside the formal FTA framework while reshaping its economic value.
Climate Compliance as Market Entry Condition
The broader concern is cumulative compliance. CBAM does not operate in isolation. The EU Deforestation Regulation, supply-chain traceability rules, and ESG-linked disclosure expectations together create what analysts describe as an embedded climate cost for market access.
Colette van der Ven, Founder and Director of Tulip Consulting, noted that CBAM was a key sticking point in EU–India negotiations. “Even if the Indian government’s press statements suggest that there are provisions around MFN treatment, that may, in practice, not have very much value… giving country-specific flexibilities was already off the cards for the EU.”
In effect, climate-linked measures are emerging as non-negotiable features of trade architecture.
Divergent Impact: Large Firms vs MSMEs
The climate-trade shift is not uniform in its impact.
Large integrated producers such as Tata Steel and JSW, according to van der Ven, are relatively insulated. Many operate European subsidiaries, have internal monitoring, reporting and verification (MRV) systems, and possess capital for cleaner technologies. For them, CBAM is a manageable compliance cost.
However, the situation is starkly different for MSMEs.
Ajay Srivastava pointed to early evidence from CBAM’s reporting phase, which began in October 2023. “In FY25, our exports of steel and aluminium to the EU were down by 24%. Why? Because MSMEs could not supply data, and EU-based importers stopped placing orders from them. So, MSMEs will be the hardest hit. It will soon be a game only for large players.”
Van der Ven added that default carbon values under CBAM are punitive. “Even if you have relatively clean production, but you cannot measure it, you are still going to be getting a default value that is a lot higher than the actual carbon emissions… That means that your competitiveness level goes down.”
The key barrier is not necessarily emissions intensity, but data asymmetry and compliance infrastructure.
Trade Policy as Domestic Climate Policy
Suranjali Tandon, Associate Professor at NIPFP, framed the issue more fundamentally: “All matters of trade policy are also matters of domestic economic policy.”
She argued that Indian firms will require domestic carbon pricing, measurement systems, and industrial support mechanisms to respond effectively. “Indian companies need to have their own carbon pricing to be able to respond to such measures… The best thing that can be done is to have measurement systems in place while ensuring that there are domestic policies that support increasing production capacity.”
Without robust domestic support — incentives, certification regimes, transitional demand buffers — exporters may struggle to absorb external carbon costs.
Fragmented Global Carbon Regimes
A central tension lies in fragmentation. EU-bound exports account for roughly 20% of India’s trade. The remaining 80% flows to markets without CBAM-style requirements.
Srivastava highlighted the dilemma: Indian firms may need separate production processes for EU markets, raising costs across their operations. Producing “green” goods for a minority of export destinations could erode competitiveness elsewhere.
This fragmentation complicates investment decisions. Without globally harmonised carbon pricing, unilateral measures risk distorting trade patterns rather than aligning them.
Strategic Choices Ahead
The discussion suggests that FTAs are no longer purely about tariffs and quotas. They increasingly interact with carbon pricing systems, sustainability standards, and domestic regulatory reforms.
Recommendations emerging from the dialogue include:
>> Prioritising measurement and MRV infrastructure, especially for MSMEs
>> Designing selective emissions trading systems, beginning with large emitters
>> Aligning industrial, trade, and climate policies domestically
>> Viewing FTAs as platforms for cooperation, rather than solutions in themselves
Archana Chaudhary of Climate Trends summarised the broader shift: “Trade seems to be forcing domestic climate action and capital is being steered in that direction. These new trade deals and the carbon-linked rules are going to be shaping up India’s real economy.”
Climate Alignment or Competitiveness Risk?
The deeper climate perspective is complex. On one hand, CBAM aligns with long-term decarbonisation goals. On the other, its current design places disproportionate adjustment burdens on developing economies and smaller firms.
Van der Ven suggested that alignment exists beneath the friction. “Beyond the differences, there is alignment between the EU and India in wanting to decarbonize. We must think towards these win-win opportunities along the supply chain.”
The outcome, however, will depend less on individual FTAs and more on whether India can integrate trade, industrial, and climate strategies coherently at home.
As climate-linked trade measures proliferate, India’s FTAs may increasingly serve not just as economic agreements — but as de facto climate policy instruments reshaping the country’s industrial future.
Climate
South India to Develop India’s First Personalized Heat Health Risk Tool
Researchers in South India are developing a personalised heat health risk tool that could improve heat warnings by linking environmental conditions with individual health risks.
India’s response to extreme heat is entering a new phase. As climate change intensifies heat stress across the country, researchers are moving beyond forecasting temperatures to understanding how heat affects the human body. A new four-year study in Tamil Nadu and Karnataka hopes to answer that. Researchers are working to develop what could become India’s first personalised heat health risk tool—one that combines weather data with physiological and health information to identify who faces the greatest risk during extreme heat.
The heat health impacts of are already being felt in ways that go beyond heatstroke and dehydration, affecting everyday aspects of life, including sleep and well-being. Climate Central estimates that people across southern India lose 78 to 91 hours of sleep each year because nights remain too warm, with eight to nine hours directly attributable to climate change. In a separate analysis, the organisation also identified Tamil Nadu as India’s most affected state by rising humid heat, highlighting the growing burden of hotter, more humid conditions on heat health.
The findings are expected to strengthen Heat Action Plans and support the development of a location-specific early warning application. The initiative is led by the M.S. Swaminathan Research Foundation (MSSRF) in collaboration with the governments of Tamil Nadu and Karnataka, the Indian Institute of Science (IISc), the Schizophrenia Research Foundation (SCARF), and two Indian Council of Medical Research (ICMR) institutes—the National Institute of Traditional Medicine in Belagavi and the National Institute of Epidemiology in Chennai.
The Same Heat, But Different Heat Health Risks
Heatwave alerts issued by the India Meteorological Department (IMD) are based on temperature thresholds. While they warn people when dangerous conditions are expected, they cannot capture how differently heat affect an individual’s hea.
An elderly person in a poorly ventilated home, a sanitation worker outdoors for hours and an office employee in an air-conditioned building may experience the same day’s temperature, but not the same health risks. Humidity, air pollution, housing, occupation, age and existing illnesses all influence how the body responds to heat.

The need to understand these differences is growing. In its seasonal outlook for April to June 2026, the IMD forecast above-normal heatwave days across parts of east, central and northwest India, as well as the southern peninsula. It also warned that maximum temperatures in several regions would range between 40°C and 44°C, with some areas likely to record temperatures more than 5°C above normal.
Children, older adults, outdoor workers and people living with chronic illnesses are expected to be among the most vulnerable.
Studying Heat Inside and Outside the Home
The research will cover Perungudi in Chennai and Poompuhar in Mayiladuthurai district in Tamil Nadu, along with Sirwar in Raichur district and Challakere in Chitradurga district in Karnataka. Around 1,200 households will participate, with data collected during both summer and non-summer months to compare seasonal changes in heat health.
Weather monitoring systems at each site will continuously record temperature, humidity, air quality and pollution levels. Selected participants will also wear digital watches that track their surface body temperature, helping researchers compare environmental conditions with the body’s physiological response.
The study will examine physical and mental heat health impacts, document how households cope with prolonged heat and estimate how much heat stress is associated with even a one-degree rise in environmental temperature.
According to MSSRF Chairperson Dr. Soumya Swaminathan, the goal is to generate detailed evidence on heat’s health impacts so government departments can better target interventions.
Researchers will also assess how prepared healthcare facilities—from primary health centres to tertiary hospitals—are to manage heat-related illnesses, an area that has received relatively little attention.
Rethinking Heat Action
One of the study’s key outcomes will be a personalised heat-impact metric for individuals, households and communities, along with a location-specific early warning application that translates scientific findings into practical risk information.
The research marks a shift in India’s approach to extreme heat. Rather than focusing only on forecasting high temperatures, it seeks to understand how heat affects different people under different living conditions. The findings could help governments refine Heat Action Plans, improve healthcare preparedness and direct resources towards populations facing the greatest risk.
As heatwaves become more frequent, predicting where temperatures will rise is only part of the challenge. Understanding who is most vulnerable could prove just as important.
Climate
After Kalladi, Meppadi’s Biggest Fear Still Looms Above the Hill
A landslide at the Kalladi tunnel project has renewed fears in Meppadi, where residents say every monsoon brings uncertainty. Experts explain why fragile geology, changing rainfall and human interventions are increasing landslide risks.
Every monsoon, residents of Kalladi in Wayanad look not at the rain, but at the hill above their homes. Two years after the Chooralmala tragedy, Kalladi landslide has reignited questions about whether fragile landscapes, climate change, and development are together creating an increasingly dangerous future.
MEPPADI (WAYANAD, KERALA): Every monsoon begins with a Look Up. When the rain begins, Nishal no longer watches the road outside his house. He watches the hill. A massive mound of excavated soil sits on the slope above his village in Kalladi, a hamlet in Meppadi panchayat in Kerala’s Wayanad district, where work on the Anakkampoyil–Kalladi–Meppadi twin-tunnel project is underway. It has sat there since the earth was excavated for the project, and with every spell of rain, it has become the first thing residents look at.
“People are scared to live here,” Nishal says. “The soil was kept there so it could be used later for construction. But once the monsoon arrives, we don’t feel safe anymore. If it isn’t managed properly, another disaster could happen.”
His fears are rooted in recent memory.
On July 7, 2026, a landslide swept through the tunnel construction site, killing eight workers. Although the disaster was far smaller than the Chooralmala-Mundakkai landslides that devastated Meppadi in July 2024, it reopened a question many thought would have been answered after that tragedy, two years ago: how safe are the hills people continue to live beneath?

The Landslide Changed the Questions
For Roshna, a former Block Panchayat member who lives near the construction site, the latest landslide has made every rainy day uncertain again.
“I am 56 now. If something happens to my house, I cannot build another one,” she says.
She is not opposed to the tunnel project. Few residents say they are. What worries them is whether the landscape has been made more fragile than it already was.
After the landslide, a committee was appointed to study how the excavated soil stored on the hill could be removed safely. Residents say experts have suggested reducing the height of the mound gradually instead of removing it all at once.
“I only want the issue to be handled properly,” Roshna says. “The project should be completed safely.”
More Than Just Heavy Rain
The Kalladi landslide has also drawn attention because it did not unfold under the same conditions as the Chooralmala disaster.
Scientific studies on the 2024 landslides show that Chooralmala was preceded by nearly two weeks of persistent rainfall that progressively saturated the slopes before they failed. That prolonged rainfall was a crucial factor behind the scale of the disaster.
Prof. S. Abhilash, Head of the Department of Atmospheric Sciences, Cochin University of Science and Technology say the situation at Kalladi was different.
“Landslides are not caused by the rainfall received on a single day,” he says. “What matters is antecedent rainfall. When rain continues over several days, the soil becomes saturated. At that stage, even another 20 or 30 millimetres of rain can trigger a landslide.”
That is why, he says, rainfall alone cannot explain the Kalladi incident. The geology of the slope and the way the landscape has been altered also need to be understood. He argues that replacing native deep-rooted trees with coffee and tea plantations, which have shallower root systems, has made the slopes more vulnerable to landslides.
Why Meppadi Keeps Failing
The hills around Meppadi have always been vulnerable.
The Western Ghats are among the oldest mountain systems in the world. Millions of years of weathering under the southwest monsoon have weakened the rocks beneath Wayanad. Above them lie thick layers of weathered soil. In places such as Meppadi, the terrain is further weakened by steep slopes, fractured rocks, foliated joints and geological lineaments.
“Meppadi has historically remained a landslide-prone area,” says Prof. S. Abhilash. “Not every high-hazard zone experiences repeated landslides, but this landscape has all the conditioning factors that make slope failure more likely.”
The record bears that out. In 2019, a landslide at Puthumala, another settlement within Meppadi panchayat, killed 17 people, five years before Chooralmala. Kalladi is now the third major landslide to strike this one panchayat in seven years. The Geological Survey of India estimates that nearly 19,301 sq. km, or 49.7 per cent of Kerala, falls within landslide-prone terrain, with Wayanad among the districts facing the highest risk — GSI assessments put 51 per cent of Wayanad and 74 per cent of Idukki on mountainous slopes classified as landslide-prone. Kerala recorded 2,239 major landslides between 2015 and 2022, the highest of any state in the country, according to Union government data.
A Changing Monsoon Meets an Old Landscape
The vulnerability of the hills is now intersecting with a changing climate.
Prof. Abhilash says the warming southeastern Arabian Sea is altering the behaviour of rain-bearing clouds over Kerala. Vertically developed cumulonimbus clouds that once discharged much of their moisture over the sea are increasingly moving inland. Over the past decade, northern Kerala has witnessed more frequent episodes of intense rainfall, contributing to flash floods and landslides.
But climate alone does not explain what is happening.
“The trigger may be rain,” he says, “but whether a slope fails depends on the condition of the landscape.”
Where Development Meets Risk
That is where residents believe the conversation should now shift.
Prof. Abhilash says replacing native forests with plantations, cutting roads through hillsides and excavating the base of slopes without adequate stabilisation can all increase landslide risk. In Kerala’s weathered mountains, where thick soil rests on fragile bedrock, even relatively small disturbances can destabilise a slope.
“The tunnel project is not the problem,” he says. “The question is whether the site was geologically suitable.”
He argues that infrastructure in fragile mountain regions should be preceded by detailed geological investigations, slope stability assessments and rigorous environmental impact studies rather than relying on engineering models developed for very different terrains.
Waiting for the Next Rain
After the Kalladi landslide, Dilip Buildcon Ltd — the construction company Konkan Railway Corporation awarded the tunnel project to in June 2025 — announced ₹6 lakh as immediate assistance to the families of its seven employees who died in the incident. The family of a contract worker was offered ₹5 lakh, while the Kerala government announced an ex gratia of ₹5 lakh for each bereaved family.
For Nishal and his neighbours, however, compensation is not what occupies their thoughts.
What they see every day is the mound of earth still overlooking their homes.
It is not simply excavated soil. It is a reminder that, in Meppadi, recovery is measured not only by rebuilding after a landslide, but by whether people can trust the hillside above them again.
Climate
Heavy Rain Slows Rescue as Flash Floods Devastate Parts of Jammu and Kashmir
Days of intense monsoon rain triggered flash floods and landslides in Jammu and Kashmir’s Poonch and Rajouri districts, killing at least 14 people and damaging homes, schools and roads. As rescue teams battle continuing rain and blocked access routes, the India Meteorological Department has warned of more heavy rainfall, raising the risk of fresh floods and landslides.
Flash floods in Jammu triggered by days of intense monsoon rain have pushed parts of the Union Territory into a humanitarian crisis. Torrential rain unleashed flash floods and landslides across Poonch and Rajouri districts, killing at least 14 people, damaging homes and schools, and cutting off several remote settlements. With the India Meteorological Department forecasting more heavy rainfall over the next two days, authorities fear rescue and relief operations could become increasingly difficult.
Search Continues Amid Difficult Conditions
Rescue operations entered their second day on Monday, with teams from the National Disaster Response Force (NDRF), State Disaster Response Force (SDRF), the Army, police and civil administration searching for those still missing and assisting residents stranded in flood-hit villages.
However, continuous rain, waterlogged roads and fresh landslides have slowed the operations. In several places, debris, damaged roads and overflowing streams have prevented rescue teams and heavy machinery from reaching affected villages, forcing personnel to proceed cautiously in difficult terrain.
Officials said the death toll could rise as search efforts continue in remote areas that remain inaccessible, while authorities work to restore road connectivity and other essential services disrupted by the heavy rain.
Very Heavy Rainfall Triggers Widespread Damage
The India Meteorological Department (IMD) said Rajouri recorded 135 mm of rainfall in the 24 hours ending 8.30 a.m. on July 20, placing it in the ‘very heavy rainfall’ category. The weather system has remained active over the region, and the IMD has forecast heavy to very heavy rainfall across Jammu and Kashmir until July 22, with isolated spells of extremely heavy rainfall likely in some places.
The weather office has also warned of flash floods, landslides, mudslides and shooting stones in vulnerable areas, particularly across the Jammu division. The continuing rainfall has increased the risk of fresh slope failures, making rescue work more hazardous.

Flash Floods in Jammu: Homes, Schools and Public Infrastructure Affected
The floods have caused extensive damage to homes and public infrastructure. According to the administration’s preliminary assessment, more than 100 houses have been damaged across the affected districts.
The disaster has also disrupted education. Around 24 school buildings have sustained damage, although officials are still assessing the extent of structural loss. Several schools are expected to remain closed until safety inspections are completed.
Road connectivity has also been severely affected. Landslides have blocked key routes, while electricity, drinking water supply and communication services have been disrupted in many villages.
Government Steps Up Response
Chief Minister Omar Abdullah chaired a high-level review meeting in Jammu on Sunday to assess the situation. He directed Deputy Commissioners to closely monitor flood- and landslide-prone areas and ensure rescue teams, machinery and emergency services remain ready for immediate deployment.
He also instructed officials to expedite the restoration of roads, electricity, drinking water supply and communication links, while prioritising efforts to trace missing persons and provide relief to affected families.
More Rain Likely Over the Next Two Days
As extreme weather events become more frequent across India, communities are increasingly living with the aftermath of recurring natural disasters. Weather conditions are expected to remain unfavourable. According to the IMD, heavy rainfall is likely to continue over parts of Jammu and Kashmir until July 22. The forecast has prompted authorities to issue fresh advisories asking people living near rivers, streams and landslide-prone slopes to remain alert and avoid unnecessary travel.
The latest disaster is another reminder of the growing challenges posed by extreme rainfall in the Himalayan region. For now, the focus remains on locating the missing, restoring essential services and reaching isolated communities before another spell of heavy rain arrives.
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