Analytical Note: Carbon Markets, EVs, Energy & Infrastructure

The EU's Carbon Border Adjustment Mechanism (CBAM) came into force on January 1, 2026, imposing a carbon-linked levy on imports. For India, CBAM raises costs for exports of steel, aluminium, cement, and fertilisers. India must urgently invest in capacity-building for small and medium industries to measure, report, and verify embedded emissions.

India proposed a 'Battery Aadhaar' system for full lifecycle traceability of EV batteries. India faces a critical supply-chain vulnerability as 84% of lithium-ion batteries are imported from China and Hong Kong. The digital identity system enables a shift from import reliance to domestic recycling by making batteries traceable.

NITI Aayog projects a $14.23 trillion power investment for India's 2070 Net Zero goal. The scale highlights the power sector as a core priority, with non-fossil sources expected to supply 98% of generation. A key challenge will be matching grid expansion with rapid renewable growth to avoid integration bottlenecks.

Finance Minister launched the National Monetisation Pipeline 2.0 targeting ₹16.72 lakh crore. In environmental governance, the CPCB flagged gaps in India's e-waste recycling infrastructure, noting that only 15% is processed through formal channels.