Global trade is entering a carbon-priced era, where climate policy and market access are increasingly interconnected. The EU’s Carbon Border Adjustment Mechanism (CBAM) exemplifies this shift by placing a measurable carbon cost on emissions-intensive imports and linking competitiveness to verified emissions performance rather than just production cost or scale, according to Ernst & Young (EY). For India, where industrial systems remain largely dependent on coal and energy-intensive processes, this marks a fundamental shift in how exports are priced, verified, and negotiated.

CBAM’s scope directly intersects with India’s trade profile. Steel, aluminium, cement and fertilisers make up most CBAM-covered exports and now face higher landed costs in the EU, closer scrutiny of plant-level data and formal verification at the installation level, said Saunak Saha partner, Climate Change and Sustainability Services at EY India in an article titled ‘How Indian industries are adapting to CBAM and carbon pricing’.

Global trade is entering a carbon-priced era as the EU’s CBAM links market access to verified emissions, according to EY.
For India, this raises export costs in key sectors like steel and aluminium while pushing decarbonisation efforts.
Firms are shifting strategies and markets, while India’s Carbon Credit Trading Scheme aims to internalise costs domestically.

The policy timeline raises the stakes. After a transitional reporting period that began in October 2023, the definitive phase from January 1, 2026, requires importers to purchase CBAM certificates aligned with European Union—Emissions Trading system linked carbon prices. The first annual declaration for 2026 imports—along with certificate surrender—is due on September 30, 2027. For Indian producers, this formalises carbon as an explicit line item in export economics, with downstream product coverage expected to broaden over time.

Importantly, CBAM is also reshaping revenue strategy—not just compliance cost. Exporters that diversify away from concentrated EU exposure toward select Africa, West Asia and Latin America markets can defend or even enhance unit realisations, particularly when paired with credible low-carbon attributes.

The Carbon Credit Trading Scheme (CCTS) anchors a national carbon price in the very sectors that CBAM targets, allowing carbon costs to be internalised at home rather than paid at the EU border. That keeps revenues within India’s fiscal system and enables strategic recycling toward Indian industrial decarbonisation, clean-technology deployment and household welfare protection.

Just as importantly, a credible, rules-based CCTS—underpinned by strong MRV—enhances India’s standing in climate-trade forums and supports arguments for recognising an ‘effectively paid’ domestic carbon price. In practical terms, this reframes CBAM from a unilateral liability into a managed, development-aligned transition tool.

Treat CBAM as a structural signal, not a temporary hurdle. Build verifiable emissions baselines, prioritise technology shifts that cut intensity fastest per rupee invested and craft go-to-market strategies that monetise low-carbon attributes across multiple destinations. With disciplined MRV, targeted capex and a credible domestic carbon market, Indian producers can protect market access, lift realisations and compete in a world where carbon—and proof of reduction — has become part of the price, added the article.

Fibre2Fashion News Desk (SG)

United States Department of Agriculture (USDA) has projected higher cotton sowing area and output in India. In its latest report, USDA’s Foreign Agriculture Service (FAS) has projected 3 per cent higher acreage and 7 per cent higher production in next season 2026-27, which begins on October 1. Higher acreage and production will be driven by expectations of stronger cotton demand, it said.

The USDA said in its report that India’s cotton area is estimated to increase to 11.5 million hectares, up 3 per cent from the previous year, while production is forecast at 25.2 million bales (480 pound or 220 kg), marking a 7 per cent rise. In Indian terms, this translates to around 32.3 million bales of 170 kg, or nearly 5.5 million tonnes.

USDA projects India’s cotton acreage to rise 3 per cent and production 7 per cent in 2026–27, supported by better yields and a normal monsoon.
Domestic consumption is expected to grow on stronger textile exports, while imports decline and exports soften.
Higher stocks and favourable cotton-polyester dynamics signal comfortable supply, despite rising input cost pressures.

The production increase is driven by a recovery from last season’s untimely rains and a projected improvement in yield to 477 kg per hectare, up 3 per cent year on year. A normal monsoon outlook and better crop conditions are expected to further support output.

On the demand side, India’s domestic mill consumption is projected to rise to 25.8 million bales, reflecting improved prospects for textile and apparel exports. Higher demand is also likely to be supported by recent trade agreements with the EU and the UK, which are expected to boost shipments of value-added products.

India’s cotton imports are estimated at 3 million bales, lower than the previous year, as improved domestic availability reduces reliance on overseas purchases. In contrast, exports are forecast to decline to 1.2 million bales, down from the previous year, due to tighter exportable surplus and a strategic shift towards higher-margin textile exports.

Total cotton supply is expected to increase to around 39.3 million bales in next marketing year, supported by higher production and elevated beginning stocks. Ending stocks are projected to rise further to 12.3 million bales, pushing the stock-to-use ratio to about 46 per cent, indicating comfortable availability in the domestic market.

At the same time, rising crude oil prices continue to influence the cotton economy by increasing input costs such as fertilisers and agrochemicals, while also raising polyester fibre prices and improving cotton’s relative competitiveness, the report said.

Overall, the outlook for India’s cotton sector in 2026–27 points to a recovery-driven expansion, with higher acreage, improved yields, and strong domestic demand shaping market dynamics, even as export competitiveness and cost pressures remain key concerns.

Fibre2Fashion News Desk (KUL)

The Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) recently urged the government to review provisions of the recently-amended labour law, including the definition of workers and employees, collective bargaining agents (CBA) and the formation of provident funds.

“The revised definition of workers and employees in the Bangladesh Labour Ordinance 2025 has created confusion and does not align with the recommendations of the tripartite consultative committee (TCC),” BKMEA president Mohammed Hatem told a press conference.

Bangladesh trade body BKMEA has urged the government to review provisions of the recently-amended labour law, including the definition of workers and employees, collective bargaining agents and the formation of provident funds.
The new ordinance defines employees as workers, he noted.
He called for a unified facility for provident funds and the universal pension scheme as maintaining both is impractical.

The new ordinance defines employees as workers, he noted. Previously, those engaged in administrative, supervisory or managerial roles were not classified as workers.

Hatem noted that at the TCC meeting, representatives of owners, workers and the government had agreed that employees under a specific labour law provision would not be treated as workers. The amendment, however, is ambiguous and may lead to pressure from international buyers to extend equal benefits to employees as workers, he was cited as saying by domestic media outlets.

The BKMEA president said employees’ benefits are determined by their appointment letters, and including them within the definition of workers would blur the distinction between management and labour, complicating decision-making and factory operations.

Such a move could weaken management structures, disrupt responsibilities and ultimately affect productivity, he added.

He also called for revisions to provisions relating to workers’ provident funds and the universal pension scheme, arguing that maintaining both would be impractical. He urged the government to introduce a single unified facility.

Fibre2Fashion News Desk (DS)