CBAM & Indian Steel: Mohit Kapoor on MSME Compliance and Carbon Credit Banks

Shubham Thakur: Hello and welcome to another interesting podcast by CleanCarbon.ai. I’m Shubham Thakur, CBAM expert and climate journalist here, and today we have a very special guest, Mr. Mohit Kapoor. Thank you so much, sir, for joining us.

Mohit Kapoor: Thank you, Shubham, for inviting me.

Shubham Thakur: He is an advisor at AIIFA, the Sustainable Steel Manufacturers Association, formerly known as the All India Induction Furnaces Association. It is a premier national industry body dedicated to driving sustainable growth in India’s steel manufacturing sector. Mohit comes with years of experience in the Indian iron and steel sector and has been closely observing all the developments in the CBAM world, particularly its impact on the Indian MSME and iron and steel sector. Thank you again for your time, sir.

My first question is, in your experience—because you have been talking to multiple stakeholders, industry bodies, and even the people who are actually impacted by CBAM—what is the biggest misconception in the Indian exporters about the CBAM, even as we are in the mandatory reporting phase?

Mohit Kapoor: The biggest misconception is that people are thinking about CBAM being a hurdle or a restriction or a problem for them. In a country like India, where despite being the second-largest steel producer and the fastest-growing producer and user of steel, we are still a cost-sensitive market, not value-sensitive. People are unfortunately looking at CBAM as a hindrance, but I personally believe this is a blessing in disguise. It is a hurdle for us to improve our systems that are rudimentary right now.

Shubham Thakur: As you mentioned, CBAM is already disrupting the Indian iron and steel industry. Do you think that the industry is not fully prepared even now?

Mohit Kapoor: We have to understand that the rate and the quantum of change is the only constant. We have to change our mindset from being cost-sensitive to value-sensitive. We are not yet fully prepared, but we lack the intent of elevating ourselves. Through AIIFA, we have been conducting sessions called ‘AIIFA Sambad’ to guide industry players and help them understand the international changes that are happening.

Shubham Thakur: MSMEs are facing a lot of difficulties when it comes to CBAM reporting and dealing with the impact. One of the major challenges is the lack of adequate infrastructure for data collection and carbon accounting. How can MSMEs comply with CBAM despite these roadblocks?

Mohit Kapoor: Carbon accounting is now as rigorous as financial accounting; without it, people cannot survive. A generic national emission average or loose “back of the napkin” calculations are completely gone. We have to have an audit-ready framework that requires direct, continuous data inputs. I would ask my audience: just like your annual financial balance sheet, how is your carbon balance sheet ready now?

Shubham Thakur: Beyond compliance, do you think CBAM can become a competitive advantage for Indian exporters?

Mohit Kapoor: I always say that carbon saved should be credit earned. We need an intent to convert carbon saved into credit earned. AIIFA has recently signed an agreement with a Switzerland-based organization to create a carbon credit bank for the MSME steel sector in India, which will turn the table and help them save costs and gain international acceptability.

Shubham Thakur: What lessons do you think the exporters have learned from the transition period, and how are they navigating CBAM?

Mohit Kapoor: Those who took it seriously are almost ready to navigate these rough waters. Those who learned lately are now trying to catch up. We have to consider that CBAM is a reality. We need government policies that treat this as a strategic investment rather than a subsidy. We need to create technology adoption funds and prioritize R&D facilities to develop India-centric technology.

Shubham Thakur: What advice do you have for Indian exporters who want to export to Europe and other parts of the globe in a climate-conscious economy?

Mohit Kapoor: There is no point investing our time, money, and effort today for a darker future where our next generations are forced to carry oxygen cylinders. We need to act responsibly and pragmatically. It is not just about economic gain; it is a matter of professional survival. We need to have a multifaceted mindset—not just focusing on per-ton production, but on the future of your generations to come.