India’s first compliance carbon market has moved from design to implementation, with formal trading in carbon credit certificates expected to begin before the end of 2026.
The Carbon Credit Trading Scheme took legal shape in June 2023 under an amendment to India’s Energy Conservation Act. At the Prakriti 2026 conference in New Delhi, Union Power Minister Manohar Lal Khattar launched the Indian Carbon Market Portal and said trading would start within four months.
The compliance market binds nearly 490 large industrial units in seven energy-intensive sectors: aluminium, cement, chlor-alkali, fertiliser, iron and steel, pulp and paper, and textiles. Under rules notified by the Central Electricity Regulatory Commission in February 2026, carbon credit certificates may be bought and sold only through registered power exchanges. The first batch of certificates is due in October 2026, with the first formal trading window running from November 2026 to January 2027.
The power sector, which accounts for nearly 40% of national emissions, sits outside the initial boundary. The IEEFA report calls that a deliberate sequencing choice, with industrial sectors drawn in first.
Border carbon costs are part of the backdrop. Indian steel and aluminium shipments to the European Union dropped 24.4% in the 2025 financial year, before any charge under the EU’s carbon border adjustment mechanism had taken effect, and steel fell 35.1% on its own, a sign, IEEFA argues, that European buyers are already reorienting.
“Every major emissions trading system (ETS) began with compliance entities only. The CCTS is right to do the same,” said Saurabh Trivedi, a lead specialist at IEEFA.
Sources
- India's Carbon Credit Trading Scheme: A strong start, critical design choices ahead | IEEFA
- Prakriti 2026: India Launches Carbon Market Portal & Announces Trading to Begin in 4 Months | Indian Carbon Market
