# What Government Support Can Indian MSMEs Get for CBAM Compliance?

Canonical: https://senseible.earth/climate-intelligence/cbam-support-for-indian-msmes

Published 2026-10-13.

For a small Indian steel or aluminium exporter, the first CBAM bill is not the certificate cost. It is the cost of the paperwork: measuring emissions per product, hiring a consultant, and paying an accredited verifier. Industry estimates put the reporting cost alone at ₹15 lakh to ₹20 lakh per MSME. The question many owners ask is whether the government will help pay for it.

This article sets out what has been announced, what is only reported, and what the India-EU trade agreement says.

## Announced: reimbursement under TRACE

In February 2026, the Commerce Minister said the government would fund a major share of EU compliance costs for micro and small exporters, as Angel One reported. The support sits in the **Trade Regulations, Accreditation and Compliance Enablement (TRACE)** component of the ₹25,060 crore **Export Promotion Mission**:

- **What it covers:** testing, inspection and certification costs linked to overseas rules.
- **How much:** up to 75 percent of eligible expenses.
- **Cap:** ₹25 lakh per importer-exporter code per year.
- **Condition:** subject to the scheme guidelines.

CBAM verification by an accredited verifier is the kind of certification cost this is meant for. Check the DGFT or Commerce Ministry guidelines for what counts as eligible and how to claim.

## Reported, not confirmed: a 90 percent scheme

Several outlets have reported that the government is preparing a scheme to reimburse 90 percent of CBAM compliance costs for eligible MSMEs, covering carbon accounting systems, third-party verification and reporting. Its structure and priority sectors had not been published at the time of writing. Do not plan around it until it is notified.

## The India-EU trade agreement

Reports on the India-EU free trade agreement, concluded in January 2026, describe four CBAM points:

1. **No exemption.** Indian goods still pay CBAM.
2. **Equal treatment.** Any CBAM flexibility the EU gives another country in future extends automatically to India.
3. **A separate CBAM annexure** with cooperation on recognising carbon prices and verifiers, plus financial assistance and targeted support.
4. **A non-violation clause** to protect India against new measures.

Industry has also asked for mutual recognition between EU verification bodies and India's Export Inspection Council, which would cut the cost of foreign audits. That had not been agreed at the time of writing.

## What to do while support takes shape

- **Keep every invoice for compliance spending:** consultants, verifiers, testing. Reimbursement schemes pay against documented costs.
- **Do the cheapest work first.** Building your emissions record from fuel invoices, electricity bills and production data costs little and is needed whatever support arrives.
- **Book verification early,** as accredited verifiers are scarce; see [how to get CBAM emissions verified](https://senseible.earth/climate-intelligence/cbam-verification-non-eu-producer).

Senseible builds that record from your existing documents, with each figure linked to its source, which shortens the verifier's work and the bill that comes with it. For the cost side, see [CBAM cost for Indian steel exporters](https://senseible.earth/climate-intelligence/cbam-compliance-cost-indian-steel-exporters-2026-2034).

This is general guidance. Check DGFT and Commerce Ministry notifications for current scheme terms.

## Related guides

- [what carbon MRV is](https://senseible.earth/climate-intelligence/what-is-carbon-mrv-and-why-msmes-need-it-2026)
- [India's carbon market and the EU carbon price](https://senseible.earth/climate-intelligence/trading-air-for-assets-india-carbon-markets-eu-price)
- [CBAM for Indian chemicals and fertilisers](https://senseible.earth/climate-intelligence/india-chemical-industry-cbam-exposure-analysis)
- [green loan versus traditional loan](https://senseible.earth/climate-intelligence/green-loan-vs-traditional-loan-real-cost-comparison)