Textiles Brought Under India’s Carbon Market
India has widened the scope of its national carbon market by bringing four additional carbon-intensive sectors petroleum refineries, petrochemicals, textiles and secondary aluminium, under the Carbon Credit Trading Scheme (CCTS). The expansion was notified by the government today i.e. January 29th, alongside the introduction of greenhouse gas emission intensity (GEI) reduction targets for these industries.
With the new notification, 208 companies operating across the four sectors will now be required to comply with defined emission-reduction benchmarks. This takes the total number of obligated entities under the compliance mechanism of the Indian Carbon Market (ICM) to 490, covering some of the country’s most emission-heavy industries.
The move builds on an earlier phase of the programme. In October 2025, the government had set GEI targets for the aluminium, cement, chlor-alkali and pulp and paper sectors, bringing 282 companies into the carbon market framework.
Introduced in 2023, the CCTS provides the institutional structure for carbon trading in India, with the objective of lowering greenhouse gas emissions by attaching an economic value to carbon. The scheme functions through two routes, the compliance mechanism and the offset mechanism.
Under the compliance route, emission-intensive industries are assigned GEI targets, and companies that reduce emissions beyond these targets earn Carbon Credit Certificates, which can be traded with firms that fail to meet their obligations.
According to the government, the decision to expand the market follows extensive consultations with industry stakeholders, detailed technical evaluations and coordination among multiple implementing institutions. Officials see the growing carbon market as a key policy tool to balance environmental responsibility with industrial expansion.
As the Indian Carbon Market continues to evolve, it is expected to play a central role in supporting India’s climate commitments, enabling cost-effective emission reductions while aligning industrial growth with the country’s long-term net-zero ambitions.
