As Brazil pushes for a global forum linking climate and trade, India stands at a crossroads — resist new carbon rules or reshape them to reflect equity and development
The Brazilian COP30 presidency’s push to institutionalise an Integrated Forum on Climate and Trade marks a turning point in international climate diplomacy. This also brings India at a historic crossroads.
The emerging coalition of global powers—the European Union, China, and Brazil—signals an irreversible move toward unified global carbon pricing systems closely linked to trade regulations like the EU’s Carbon Border Adjustment Mechanism (CBAM). This architecture promises potent climate action. It also underscores the urgent need for India to assert its voice, interests, and values within this new multilateral ecosystem.
The COP30 presidency letters have placed trade and carbon markets explicitly as “enablers and accelerators” of climate progress, and are rightly pushing for a global dialogue to break ideological silos and align international market mechanisms. This COP30 forum that’s being launched with World Trade Organisation (WTO) and United Nations (UN) support can help harmonise standards and expand national emissions trading systems to scale decarbonisation.
According to the recent Harvard-MIT Global Climate Policy Project report, coherent international carbon pricing coalitions can cut global emissions sevenfold and generate nearly $200 billion a year in climate finance. But such coalitions also need to drive just and equitable transitions.
Finding a seat at the table
For India, this integration is an important moment, given our reservations on global climate trade moves. On one hand, inclusion in Brazil’s coalition and the COP30 forum presents a strategic opportunity to shape global standard-setting in ways that protect the country’s development priorities. India’s Carbon Credit Trading Scheme (CCTS) can be positioned as a credible and compatible component of the global carbon market architecture, helping Indian exports avoid duplicative carbon pricing under CBAM.
And India can advocate within the coalition to embed differentiated responsibilities, demand transitional flexibilities and secure targeted climate finance. This can help technology transfer and capacity-building — both key to ensuring honest burden-sharing. Basically, we can be at the table to fine tune standards, currently being shaped by only one set of nations.
However, caution is also imperative. The EU and the G7 countries, historically masters of trade and climate governance, have been criticised for bringing legacies of often self-serving policies, masked behind noble-sounding principles.
In the past, carbon offset schemes under the Kyoto Protocol and Paris Agreement have been called out for enabling rich nations to delay domestic cuts, often through projects lacking credibility. Environmental standards in G7/EU trade deals were similarly criticised for functioning as non-tariff barriers, while climate finance is frequently tied to donor-country firms and laden with debt. Even fossil fuel subsidy reforms have historically been uneven — G7 nations move slowly, while pressuring poorer countries to phase out support without viable alternatives.
The EU’s CBAM is currently under scrutiny from the Global South, as it risks becoming a protectionist barrier disguised as environmental stewardship, unfairly penalising economies whose developmental emissions follow a just growth trajectory. Across mechanisms, global climate governance is increasingly being criticised for pushing costs and constraints onto the Global South, while seemingly preserving advantages for developed economies in the name of sustainability.
Without robust safeguards, these policies risk constraining India’s industrialisation, raising compliance costs, fragmenting markets, and deepening inequities both across countries and within Indian society.
Building strong South-South alliances
Brazil’s leadership in integrating climate and trade at COP30 can drive meaningful change — but only if India builds strong alliances with like-minded Global South nations. Such alliances can challenge dominant Northern narratives to insist that trade-linked climate policies don’t throttle development but help equitable transitions. This means demanding clear rules, fair decision-making, and using the money earned from carbon markets to help the most vulnerable people and industries.
India will also need to speed up and deepen its domestic carbon market reforms and ensure robust Measurement, Reporting, and Verification (MRV) systems and broaden its sectoral coverage with transparency and inclusivity, according to experts. Building a credible, inclusive carbon market that supports sustainable growth without sacrificing social equity is as important as the urgency of putting in place systems ideally within the next two to three years, research shows.
This institutional readiness is not merely compliance — it will signal India’s capacity to lead global climate governance. And will strengthen India’s position to negotiate with credibility apart from helping to transform risks posed by CBAM into opportunities to create jobs and sustainable growth.
India’s first emission intensity targets for carbon-intensive sectors like steel, cement, and power mark a major step toward credible, market-based climate action that’s aligned with global standards.
In this transitional moment at COP30, India cannot afford to be a passive observer or mere rule-taker. Through skilled diplomacy, coalition-building, and pioneering domestic reforms, India can help build a global climate-trade regime that respects the country’s ecology and developmental realities.
This is a pivotal moment for India to shift its stance from defending against policies like CBAM to actively shaping the global climate-trade agenda. India’s ability to influence rules on carbon pricing, market transparency, and trade barriers will decide whether these emerging tools open opportunities or create new exclusions.
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