Carbon is steadily evolving from a sustainability metric into a core business variable influencing trade competitiveness, financing decisions and long-term commercial viability for Indian companies, according to a new report released by Rubix Data Sciences in collaboration with Breathe ESG. Titled “Carbon as a Business Variable: Trade, Risk, and the Evolution of India’s Carbon Market,” the report examines how climate-linked regulations, carbon pricing mechanisms and disclosure requirements are reshaping the operating environment for Indian industry. The findings come as India prepares to operationalise its domestic carbon market in 2026 amid tightening global climate regulations and growing scrutiny around industrial emissions.
The report notes that carbon exposure is increasingly impacting business costs, profitability, supply-chain structures, export competitiveness and credit-risk evaluation. Export-oriented sectors such as steel, aluminium, cement and fertilisers are expected to face heightened pressure due to mechanisms like the European Union’s Carbon Border Adjustment Mechanism (CBAM), which effectively places a carbon-linked cost on imports entering the EU market.
India has emerged as a major contributor to the voluntary carbon market, with more than 375 million carbon credits issued between 2010 and 2025. However, the report points out that a significant portion of the economic value generated through these credits has historically accrued outside the country. The introduction of the Carbon Credit Trading Scheme (CCTS) and the Indian Carbon Market framework is expected to support greater domestic retention of both environmental and economic value.
The study also highlights operational challenges within India’s carbon ecosystem. An assessment of more than 1,100 Verra-certified Indian carbon projects by Rubix Data Sciences revealed that only around one-third of projects successfully reach registration. Verification hurdles, monitoring costs and regulatory uncertainties continue to delay project implementation and monetisation, affecting investor confidence and long-term market credibility.
The report further underlines that carbon and energy exposure are becoming increasingly relevant for lenders, insurers and financial institutions. As disclosure expectations evolve under regulatory bodies such as the RBI and SEBI, financial institutions may be required to integrate carbon exposure into underwriting standards, portfolio assessments and credit evaluation frameworks.
Supply-chain emissions are also emerging as a major challenge for businesses. According to the report, Scope 3 emissions frequently exceed direct operational emissions across sectors, making supplier-level carbon transparency increasingly critical for procurement decisions, trade finance and global business continuity.
Mohan Ramaswamy, Co-founder and CEO of Rubix Data Sciences, said a large portion of carbon-related exposure for businesses is likely to emerge indirectly through supply chains, financing relationships and export dependencies rather than through direct emissions alone. He added that as international markets increasingly connect carbon exposure with pricing, procurement and financing decisions, Indian companies are entering a phase where carbon efficiency will become closely linked with competitiveness and long-term commercial sustainability.
The report concludes that India’s carbon transition is no longer confined to environmental policy discussions but is emerging as a broader economic and financial transformation. It states that carbon considerations are expected to play a growing role in enterprise valuation, supply-chain resilience, financing costs and business strategy across industries over the coming years.
Founded by experienced risk professionals, Rubix Data Sciences provides credit-risk management, supply-chain monitoring and compliance solutions for businesses in India and international markets. The company is also India’s first Validation Agent for the Legal Entity Identifier (LEI), accredited by GLEIF, Switzerland.
