Starting January 1, Indian exporters of steel and aluminum to the EU will face the Carbon Border Adjustment Mechanism (CBAM), a carbon tax based on product emissions. While EU importers legally pay, costs will likely be passed to Indian suppliers, potentially requiring price cuts of 15-22% to maintain competitiveness. The tax's impact varies by production method; cleaner processes like electric arc furnaces for steel or renewable energy for aluminum incur lower costs. This mechanism is expected to expand to more industrial goods, necessitating a coordinated response from exporters, industry, and government.