Questions we are asked most often.

They are the central rules governing waste batteries, notified by the Ministry of Environment, Forest and Climate Change on 22 August 2022 under the Environment (Protection) Act, 1986, and in force from their publication in the Official Gazette. They replace the earlier Batteries (Management and Handling) Rules, 2001 and apply across battery chemistries.

The Rules cover all battery types - portable, automotive, industrial and electric-vehicle batteries. They apply to producers, dealers and consumers, and to every entity involved in the collection, segregation, transportation, refurbishment and recycling of waste batteries.

EPR makes the producer responsible for the environmentally sound management of the batteries it places on the market. Producers must register with the Central Pollution Control Board (CPCB) and meet the collection and recycling or refurbishment targets set out in Schedule II, either themselves or through authorised entities - but the obligation always remains with the producer.

Registered recyclers and refurbishers generate EPR certificates for the quantities of waste battery they process against the applicable recovery targets. Producers discharge their EPR obligations using these certificates and may purchase surplus certificates from others to meet a shortfall, within the limits prescribed by the Rules.

No. The Rules prohibit the disposal of waste batteries in landfills and by incineration. Waste batteries must be channelled to environmentally sound refurbishment or recycling, and recovered materials must meet the minimum recovery targets prescribed for each battery type.

Yes. Producers must ensure a minimum use of domestically recycled materials in new batteries, measured against the total dry weight of the battery and phased in over time. This recycled-content obligation is a deliberate step towards a circular battery economy rather than mere end-of-life disposal.

Failure to meet EPR obligations attracts Environmental Compensation on a polluter-pays basis, determined in line with Schedule II and CPCB guidelines. Paying environmental compensation does not extinguish the underlying obligation - the producer must still fulfil its collection and recovery targets.

Yes. The BRSR replaced the Business Responsibility Report (BRR), introducing a more detailed and data-driven approach to ESG reporting.

The Business Responsibility and Sustainability Report (BRSR) is India's sustainability reporting framework for the top 1,000 listed companies. It requires companies to disclose information on their environmental, social and governance (ESG) performance and forms part of the annual report submitted to stock exchanges.

The BRSR is the overall sustainability report, while BRSR Core is a subset of key ESG indicators within that report. BRSR Core focuses on selected metrics that are subject to independent verification, which is intended to provide greater credibility in the ESG disclosures reported by companies.

BRSR Core is mandatory for the top 1,000 listed entities by market capitalisation (as on March 31 of the relevant financial year), from FY 2022-23 onward. Third-party verification of BRSR Core has been phased in by market-cap tier, covering all top 1,000 listed entities from FY 2026-27.

(1) GHG footprint, (2) Water footprint, (3) Energy footprint, (4) Waste management/circularity, (5) Employee wellbeing and safety, (6) Gender diversity, (7) Inclusive development (MSME/local sourcing), (8) Fairness to customers and suppliers, (9) Openness of business (concentration/related-party transactions).

No, Green Credits introduced by the SEBI March 2025 circular (SEBI/HO/CFD/CFD-PoD-1/P/CIR/2025/42) under Principle 6 of BRSR is a voluntary Leadership Indicator in the broader BRSR framework, it is not one of the nine mandatory BRSR Core attributes.

Previously, BRSR Core required reasonable “assurance” only. But, the March 2025 circular (SEBI/HO/CFD/CFD-PoD-1/P/CIR/2025/42) allows companies to obtain either “assessment” or “assurance,” two alternative third-party verification routes. Assessment follows standards developed by the Industry Standards Forum (ISF, comprising ASSOCHAM, FICCI, and CII) in consultation with SEBI; assurance follows the applicable assurance framework.

For BRSR purposes, a company's value chain includes its key upstream and downstream partners that individually account for 2% or more of its purchases or sales (by value). Companies may, however, limit their value-chain disclosures to partners covering up to 75% of their purchases and sales (by value).

Under the revised March 2025 framework, a value-chain partner is any upstream or downstream partner individually accounting for 2% or more of the entity’s total purchases or sales. Earlier, the framework covered partners cumulatively accounting for 75% of purchases or sales. Entities may still voluntarily limit disclosures to partners representing 75% of purchases or sales.

Value-chain ESG disclosures apply to the top 250 listed entities by market capitalisation. Under the July 2023 framework, disclosure was on a “comply-or-explain” basis, but the March 2025 framework made such disclosures fully voluntary, with no comply-or-explain requirement.

No, SEBI did not create a separate ESG framework for the value chain, it extends the same nine BRSR Core KPIs to the specified portion of the entity’s value chain, reported only to the extent attributable to the listed entity’s business with those partners.

For companies that choose to report value-chain ESG data first time, reporting of the previous year’s comparative figures is voluntary, companies are not required to reconstruct historical value-chain data they may not have previously collected.

Companies must disclose the percentage of its total purchases and total sales that are covered by the value-chain partners for which ESG data is being reported. This indicates how representative the reported data is of the company’s actual purchasing/ sales activity, given that companies now have flexibility on how much of the value chain to cover.

Essential Indicators are mandatory disclosures that companies are required to report under the BRSR. Leadership Indicators are voluntary disclosures that showcase more advanced sustainability practices and provide additional insight into a company's ESG performance.

BRSR Core covers key ESG indicators relating to a company's environmental, social and governance performance, including greenhouse-gas emissions, energy and water consumption, waste management, workforce diversity, remuneration, occupational health and safety, and employee training. These metrics are organised under nine key ESG attributes and are subject to independent verification.

Certain BRSR Core intensity metrics are calculated using PPP-adjusted (Purchasing Power Parity-adjusted) revenue to improve comparability across companies operating in different economic environments. This adjustment is intended to reduce distortions that may arise from differences in currency values and purchasing power across jurisdictions.

The BRSR is not a mere compliance formality. As part of the annual report, it carries board-level accountability, requiring directors to actively review, oversee and take responsibility for the sustainability-related disclosures made by the company. Inaccurate, misleading or incomplete disclosures could attract regulatory action and reputational consequences, making robust board oversight critical.

BRSR is mandatory for the top 1,000 listed companies in India by market capitalisation. The determination is made annually by the stock exchanges based on market-capitalisation rankings. The report forms part of a company's annual disclosures and provides information on its environmental, social and governance (ESG) performance.

BRSR Core verification has been introduced in phases for listed entities based on market capitalisation. It applies to the top 150 listed entities from FY 2023-24, the top 250 from FY 2024-25, the top 500 from FY 2025-26, and the top 1,000 listed entities from 23

The Indian Carbon Market has been operationalised under the Carbon Credit Trading Scheme (CCTS). It was notified on June 28, 2023 by the Ministry of Power under the Energy Conservation (Amendment) Act, 2022. It replaces the earlier PAT (Perform, Achieve and Trade) energy efficiency scheme.

The CCTS is India's carbon market framework, notified in 2023. It requires specified industries to meet emission-intensity targets and allows carbon credits to be earned or traded based on emissions performance. The scheme includes (a) a compliance mechanism for regulated entities and, (b) a voluntary mechanism through which eligible projects can generate carbon credits.

CCTS operates in two market segments - the compliance market and the offset market. The compliance market is for obligated entities, and the offset market is for voluntary players.

Currently, nine sectors are notified for operating in the compliance market: aluminium, chlor-alkali, cement, fertiliser, iron & steel, pulp & paper, petrochemicals, petroleum refining, and textiles. Obligated entities and their units have been identified under these sectors and targets have been notified, except for the fertiliser and iron & steel sectors.

A CCC is the tradeable unit under CCTS. Each certificate represents one tonne of CO₂ equivalent (tCO₂e) reduced or removed beyond an entity's assigned emissions intensity target. CCCs can be traded on designated power exchanges under the oversight of the Central Electricity Regulatory Commission (CERC).

It is an intensity-based (rate-based) scheme and not an absolute cap. Obligated entities are assigned GHG emissions intensity targets expressed as tonnes of CO₂e per unit of output. The targets have been notified under the GHG Emission Intensity Target Rules 2025 for the first two compliance years FY2025–26 and FY2026–27, using FY2023–24 as the baseline.

Non-obligated entities - those outside the mandatory sectors - can voluntarily register projects to generate CCCs. BEE has published the first set of offset methodologies.

The level of emissions reduction required under the CCTS varies by sector and compliance period. The scheme is designed to progressively tighten performance standards over time. The entities in covered sectors may be required to reduce their emissions intensity by a few percentage points each year, with more stringent reductions applying in later compliance periods.

Prices will be determined by market forces. Demand and supply of CCCs will determine the price at which CCCs will be traded. There will be a floor price and a forbearance price fixed by CERC on the recommendation of BEE.

A company that fails to meet its prescribed emission-intensity target may be required to purchase and surrender carbon-credit certificates or pay the applicable environmental compensation. Conversely, companies that outperform their targets may become eligible to earn and trade carbon credits.

They determine the range within which the price of CCCs will vary. The floor price is the lower limit beyond which the price of CCCs cannot drop, in order to protect the market from crashing. The forbearance price is the higher limit beyond which the price of CCCs cannot increase, thereby avoiding unchecked spikes and market turbulence.

There is no restriction per se at an entity level for operating in both markets. Of course, there should not be double counting. However, an obligated entity may face challenges in the additionality test to enter the voluntary market, in which case the specifics have to be examined in detail before reaching a conclusion.

There is no restriction regarding the business, industry or constitution of the entity registering with the voluntary market. However, there are more nuanced factors - determining the methodology, having a robust monitoring, reporting and verification (MRV) system in place, taking care of additionality and double counting risks - which have to be considered and fulfilled. With a firm strategy and clear pathway in place, any entity can monetise its emission reduction in the voluntary market.

India’s carbon market currently covers nine sectors: iron and steel, cement, aluminium, fertiliser, petrochemicals, textiles, pulp and paper, chlor-alkali, and petroleum refineries. The government has been notifying sector-specific emission intensity targets in phases, gradually expanding the compliance framework across these sectors.

The nine covered sectors together account for approximately 16 per cent of India's greenhouse-gas emissions, and the compliance mechanism will cover more than 700 million tonnes of carbon dioxide equivalent once all nine are notified.

A Carbon Credit represents a quantified reduction or avoidance of greenhouse gas emissions and may be generated under carbon-market frameworks such as the CCTS. A Green Credit recognizes specified environmental activities under the Green Credit Programme, such as actions that contribute to environmental conservation and restoration. While both are environmental instruments, they serve different purposes and are not interchangeable.

India's climate policy is centred on three broad goals: reducing the emissions intensity of its economy, increasing the share of energy generated from non-fossil-fuel sources, and achieving net-zero emissions by 2070. These commitments underpin several recent regulatory initiatives, including the Carbon Credit Trading Scheme (CCTS) and other sustainability-related measures.

Although the Corporate Sustainability Due Diligence Directive (CSDDD) will not apply directly to most Indian suppliers, its requirements are likely to be passed down through supply chains, with customers seeking information on environmental and human rights risks, compliance processes and supplier due diligence.

A company is required to comply with the CSR provisions of the Companies Act, 2013 if, during the immediately preceding financial year, it meets any one of the following thresholds: net worth of ₹500 crore or more, turnover of ₹1,000 crore or more, or net profit of ₹5 crore or more.

Not necessarily. A company may fully comply with its CSR obligations under the Companies Act, 2013 while still performing poorly on other environmental, social or governance metrics. CSR focuses on specified social expenditure, whereas ESG assesses the broader impact of a company's operations and governance practices.

Unspent CSR amounts cannot simply be retained by the company. Depending on whether the amount relates to an ongoing project, it must either be transferred to a designated Unspent CSR Account or to a fund specified in Schedule VII of the Companies Act, 2013. Failure to comply with these requirements may result in monetary penalties.

It is effectively unique. India was the first major economy to make CSR spending a legal duty rather than a voluntary gesture, and in its mandatory-spend form the model remains one of a kind.

Section 166 of the Companies Act, 2013 requires directors to act in good faith in the best interests of the company, its employees, shareholders, the community and for the protection of the environment. Environmental and sustainability considerations are therefore reflected in directors' statutory duties under Indian law.

The Ecomark Rules, 2024 were notified by the Ministry of Environment, Forest and Climate Change vide G.S.R. 596(E) on 26 September 2024 under the Environment (Protection) Act, 1986, and took effect on publication in the Official Gazette. They establish an eco-labelling scheme: an 'Ecomark' may be granted to a product that meets specified environmental criteria - reduced pollution and emissions, recyclability or recycled content, lower use of non-renewable resources, and reduced use of environmentally harmful materials. The stated purpose is to help consumers make informed choices, encourage greener production, and curb misleading information about the environmental aspects of products (Rules 1 and 3).

Under Rule 3, a product must (a) hold a licence or certificate of conformity to the relevant Indian Standard under the Bureau of Indian Standards Act, 2016 and/or the applicable Quality Control Order issued by the Central Government, and (b) meet the product-specific criteria set out in column (3) of the First Schedule. Those criteria can address pollution reduction, recyclability or recycled content, reduced use of non-renewable resources, and substitution of hazardous materials - and are framed considering the production process and raw-material sources, natural-resource use, environmental impact, waste and emissions, disposal and packaging, and Extended Producer Responsibility compliance where applicable (Rule 3).

Applications are made to the Central Pollution Control Board (CPCB) in Form 1 (Rule 4). CPCB - itself or through a registered verifier - checks compliance and a report is submitted within sixty days; if satisfied, CPCB grants the Ecomark. An Ecomark is valid for three years or until the Ecomark criteria for that product change, whichever is earlier, and is renewable (Rule 4). Holders file an online annual report to CPCB, which compiles them with its recommendations for the Ministry by 31 July each year. A Central Government Steering Committee oversees implementation (Rule 7). CPCB may suspend or cancel an Ecomark for false information or wilful concealment after a hearing, with an appeal to the Central Government within thirty days (Rule 5).

Under section 25 of the Water (Prevention and Control of Pollution) Act, 1974, no person may - without the previous consent of the State Pollution Control Board - establish any industry, operation, process or treatment and disposal system likely to discharge sewage or trade effluent into a stream, well, sewer or on land; bring a new or altered outlet into use; or begin a new discharge. The Board may grant consent subject to conditions or refuse it for reasons recorded in writing, and if it does not decide within four months the consent is deemed to have been given (section 25(7)). Separately, section 24 prohibits knowingly causing or permitting poisonous, noxious or polluting matter to enter a stream, well, sewer or land.

The Water (Prevention and Control of Pollution) Amendment Act, 2024 (Act 5 of 2024, in force from 15 February 2024) decriminalised most offences, replacing imprisonment with monetary penalties. Contraventions of section 24 (pollution) or the section 25/26 consent requirements now attract a penalty of not less than ten thousand rupees and up to fifteen lakh rupees, with an additional ten thousand rupees per day for continuing contraventions (sections 42, 43, 44 and the residual section 45A). Penalties are determined by a Central Government-appointed adjudicating officer of at least Joint Secretary / State Secretary rank after a hearing (section 45B), and appeals lie to the National Green Tribunal (section 45C). The amendment also lets the Central Government, in consultation with CPCB, exempt certain categories of industrial plants from the consent requirement (proviso to section 25(1)).

Section 13A of the Energy Conservation Act, 2001 ("Prohibition of use of deceptive name, etc.") bars two things. First, no person may - without the previous permission of the Bureau of Energy Efficiency - use any name that so nearly resembles the Bureau's name as to deceive, or be likely to deceive, the public (section 13A(1)). Second, notwithstanding anything in any other law in force, no registering authority may register any company, firm or other body of persons bearing a name or mark resembling the name of the Bureau (section 13A(2)). In short, the Bureau's identity is protected: you cannot trade on, or register an entity under, a confusingly similar name without the Bureau's prior consent.

Under section 2(l) of the Energy Conservation Act, 2001, the "Energy Management Centre" is the body originally set up under a Government of India Resolution of the erstwhile Ministry of Energy (Department of Power), No. 7(2)/87-EP(Vol. IV) dated 5 July 1989, and registered as a society under the Societies Registration Act, 1860. It was the predecessor institution for the country's energy-efficiency work. When the Bureau of Energy Efficiency was established under the Act, section 12 transferred the Centre to the Bureau: its assets and properties vest in the Bureau, its rights, liabilities, debts, contracts, dues and pending legal proceedings pass to the Bureau, its employees continue in the Bureau on the same terms, and any reference to the Energy Management Centre in other laws or contracts is now read as a reference to the Bureau.

Extended Producer Responsibility (EPR) is a framework under the waste management rules wherein the responsibility is placed on the Producer, Importer or Brand Owner (PIBO) introducing the product into the market. The framework provides for the collection, recycling, reuse, and end-of-life management of covered products and waste streams, thereby promoting a circular economy within the relevant waste category.

Entities subject to EPR must generally obtain the required registration and fulfil prescribed EPR targets. Depending on the applicable framework, compliance may be achieved through collection, recycling or end-of-life management of waste, either directly or through authorised recyclers and other registered entities.

Companies should first identify the ESG obligations that apply to them, establish clear oversight and accountability at the management or board level, and then focus on building reliable ESG data collection and reporting systems

ESG stands for Environmental, Social, and Governance. It is used to describe environmental, social, and governance factors considered by companies when managing their operations, and investors when making investments, in respect of the risks, impacts, and opportunities (International Labour Organisation).

No, the distinction between Corporate Social Responsibility (CSR) and ESG is legal rather than merely semantic. In India, pursuant to Section 135 of the Companies Act, 2013, CSR pertains to the way a company applies a portion of its profits towards social causes, ESG, by contrast, pertains to the manner in which the company generates such profits, that is, whether its core business operations manage environmental and social risk and are governed soundly. A company can discharge its statutory CSR duty in full and still score poorly on ESG. The scope of ESG is wider than CSR, though there is an overlap.

An ESG rating evaluates a company's performance on Environmental, Social, and Governance (ESG) factors and helps investors assess sustainability-related risks and opportunities. In India, SEBI regulates ESG Rating Providers (ERPs) through a dedicated regulatory framework, requiring registration, transparency in methodologies, and management of conflicts of interest. ESG ratings are issued by independent SEBI-regulated entities and are based on publicly disclosed and other permissible information.

Different ESG rating providers use different methodologies and weight ESG factors differently. As a result, the same company may receive different scores from different agencies. This phenomenon is commonly referred to as "rating divergence."

Four considerations are pertinent. First, access to capital, given that a substantial and growing proportion of global investment is screened through an ESG lens. Second, access to markets and supply chains, insofar as foreign regulatory requirements increasingly condition market entry. Third, the mitigation of genuine operational risk, including fires, pollution incidents, governance failures and climate-related disruption. Fourth, reputational standing with customers, employees, regulators and the communities in which the entity operates.

"Double materiality" is a principle requiring that a company report both (i) the manner in which sustainability-related matters affect its business, described as financial materiality, and (ii) the manner in which its business affects society and the environment, described as impact materiality.

Scope 1 emissions are direct emissions arising from sources owned or controlled by the reporting entity. Scope 2 emissions are indirect emissions attributable to purchased energy. Scope 3 emissions comprise all other indirect emissions occurring across the entity's value chain. The assurance requirement under India's BRSR Core framework is presently confined to Scope 1 and Scope 2 emissions.

ESG investment has grown significantly, with ESG assets projected to exceed US$53 trillion globally, representing more than one-third of total assets under management (AUM) worldwide. This demonstrates the increasing influence of ESG considerations on investment and capital allocation decisions globally.

A company should begin by identifying the ESG frameworks and regulations that apply to its business. Key considerations include a). whether it is listed, b). is subject to CSR requirements, c). falls within an EPR or carbon-market framework, and d). exports to jurisdictions with sustainability-related requirements. The applicable obligations will vary depending on the company's activities, size, sector, and markets.

Yes. While Business Responsibility and Sustainability Reporting (BRSR) disclosure requirements apply only to certain listed companies, several ESG-related obligations apply irrespective of listing status. These may arise under CSR, EPR, carbon market and other regulatory frameworks, as well as through customer and supply-chain requirements.

Companies should gather ESG data through a single, consistent process and draw on that same dataset for every report and disclosure they make. A well-designed data framework of this kind avoids duplicated effort, lowers compliance costs and improves reporting efficiency.

Yes. ESG requirements are not limited to manufacturing businesses. Depending on the nature of their operations, service-sector companies may be subject to sustainability reporting, governance, workplace and product-related compliance obligations.

The Environment (Protection) Act, 1986 forms the foundation of India's environmental regulatory framework. It empowers the Central Government to issue rules and standards on a wide range of environmental matters, including pollution control, waste management, and environmental protection

Prior environmental clearance is required for projects falling within the categories specified in the Schedule to the Environmental Impact Assessment (EIA) Notification, 2006. These include, among others, certain mining, power, industrial, infrastructure, construction and area-development projects. The applicability of the requirement depends on the category, size and location of the project.

Effective ESG governance typically involves clear allocation of oversight and accountability, informed board-level engagement with ESG matters, and integration of sustainability considerations into business strategy and decision-making. Companies should also ensure that ESG-related information and disclosures are subject to appropriate internal controls and review processes.

Yes. ESG Rating Providers (ERPs) operating in the Indian securities market are regulated by SEBI under the SEBI (Credit Rating Agencies) Regulations, 1999, as amended in 2023. The framework requires registration, disclosure of methodologies, management of conflicts of interest, and compliance with specified operational requirements.

Three things: clear allocation of oversight; board competence, since the directors who attest to sustainability disclosures must be able to interrogate them; and integration with strategy and pay, tying ESG objectives to executive incentives and capital allocation.

Companies may face regulatory, enforcement or litigation risks if ESG disclosures are materially inaccurate, misleading or incapable of substantiation. As sustainability-related disclosures become increasingly important to investors, regulators and other stakeholders, companies should apply the same level of diligence, oversight and documentation to ESG disclosures as they do to financial reporting.

Independent assessment or assurance of BRSR Core disclosures is one of the principal safeguards against greenwashing. By requiring third-party verification of key ESG metrics, the framework seeks to improve the reliability and credibility of sustainability-related disclosures.

The PPWR is the European Union's new regulation governing the entire lifecycle of packaging, from design and manufacture to reuse, recycling, and waste management. It replaces the previous Packaging and Packaging Waste Directive and aims to reduce packaging waste while promoting a circular economy.

PPWR applies to all packaging, regardless of the material used, and to all packaging waste, regardless of where it comes from and whether it originates from industry, manufacturing, retail, distribution, offices, services, or households. PPWR entered into force on February 11, 2025, and its primary general application and enforcement date is August 12, 2026.

Yes, but in two stages. From 1 January 2030, all packaging placed on the EU market must be designed so it can be recycled. From 1 January 2035, it must go a step further and be recyclable at scale, meaning it's not just theoretically recyclable, but gets collected, sorted, and recycled in practice across the EU.

Yes. Plastic packaging must contain a minimum share of recycled content from 2030 onwards. Depending on the category of packaging (as specified in the Regulation), this requirement ranges from 10% to 30%, rising further from 2040 to as high as 65% for certain categories.

Yes. PPWR requires the substances of concern in packaging to be kept to a minimum overall and sets specific limits. For example, there is a combined cap on lead, mercury, cadmium, and hexavalent chromium, plus restrictions on PFAS in food-contact packaging from August 2026. Suppliers will accordingly be expected to furnish documented proof of compliance within these limits.

Yes. Packaging must be limited to the minimum volume and weight necessary to perform its function. This is assessed against factors defined in the Regulation, such as product protection, safety, hygiene, and proper handling, not left to the manufacturer's own judgment. Features like unnecessary layers, false bottoms, double walls, and excessive empty space are specifically targeted.

Before placing packaging on the EU market, manufacturers must carry out a conformity assessment against the Regulation's requirements, compile supporting "technical documentation", covering the packaging's design, materials, intended use, and risk assessment, along with test reports, and draw up a written EU Declaration of Conformity for each packaging type, retaining both for inspection by authorities.

Yes. PPWR establishes harmonised labelling requirements to help consumers identify packaging materials and sort packaging waste correctly. For instance, a material-composition pictogram will help consumers sort waste correctly from 2028, and reusable packaging (like returnable bottles) will need to carry a "reusable" label along with a QR code or other digital carrier.

PPWR defines several categories of "economic operator", such as manufacturer, importer, distributor, and others with different obligations applying to each. Manufacturers are primarily responsible for conformity assessment and technical documentation, while importers and distributors must verify compliance before placing or making packaging available on the EU market. Other categories also exist. Suppliers must provide manufacturers with the information needed to prove compliance, and fulfilment service providers must ensure their handling doesn't compromise it.

Although PPWR is an EU regulation, its impact is likely to extend to Indian businesses that place packaged products on the EU market through importers, distributors, or direct sales channels. Indian exporters may increasingly face requests relating to recyclability, recycled content, packaging composition, conformity documentation and supply chain traceability as EU customers seek to meet their own compliance obligations.

The EU Deforestation Regulation (EUDR) is an EU law that restricts the sale, distribution, and export of certain commodities and products linked to deforestation, allowing them on the EU market or for export only if they are deforestation-free and legally produced. It applies from 30 December 2026 for large and medium-sized operators and traders, and from 30 June 2027 for micro and small enterprises. Until then, the EU Timber Regulation (EUTR) continues to apply to timber and timber products.

The Regulation covers seven "relevant commodities": cattle, cocoa, coffee, oil palm, rubber, soya, and wood. It also covers a defined list of "relevant products" made from these commodities such as leather, chocolate, tyres, furniture, paper products, palm-oil derivatives, and cattle-based food products.

Three conditions must be satisfied. First, the product must be "deforestation-free", meaning the underlying commodity was not produced on land deforested after 31 December 2020 (or, for wood, harvested without causing forest degradation after that date). Second, the product must have been produced in accordance with the relevant laws of the country of production, covering matters such as land use, environmental protection, and forestry rules. Third, the product must be accompanied by a due diligence statement confirming these facts.

The entities placing covered products on the market are required to exercise "due diligence" in three stages: collecting the information, documents and evidence needed to demonstrate compliance; carrying out a risk assessment of that information to determine whether there is a risk of non-compliance; and, where any risk is identified, taking mitigation measures to reduce it to no or negligible risk before the product can be placed on the market or exported.

A due diligence statement is the formal declaration a company submits through the EU's central information system before a covered product is placed on the market or exported, confirming that due diligence has been carried out and that no more than a negligible risk of non-compliance was found. As specified in Annex II of the EUDR, the statement must include information such as the operator's identity, details of the relevant product and quantity, the country of production, and the geolocation coordinates of all plots of land where the relevant commodity was produced.

Geolocation must be provided as coordinates using at least six decimal digits of precision. For plots of land larger than four hectares, companies must submit a polygon marking the full perimeter of the plot rather than a single point. For smaller plots, and for cattle establishments, a single coordinate point is sufficient. This traceability requirement applies to the individual farm or plot level, not merely to a supplier or region.

Yes. Micro and small enterprises acting as "primary operators"; broadly, farmers and first-stage producers established in a low-risk country, may submit a simplified, one-time declaration instead of a full due diligence statement for each shipment. This simplified declaration may use the postal address of the plot or establishment in place of full geolocation data and can be updated only when there is a material change, rather than filed afresh each time.

The Commission classifies every country, or parts of a country, into one of three risk categories - low, standard or high, based primarily on deforestation rates, the rate of agricultural expansion into forest land, and production trends for the relevant commodities. Where all the relevant commodities in a product were produced in a low-risk country, the company exercising due diligence is not required to carry out the fuller risk-assessment and mitigation steps, though it must still collect the underlying information and geolocation data and may be asked to justify the low-risk classification if concerns are later raised.

Under the Commission's benchmarking list, India along with the large majority of countries has been classified as low risk. The Commission reviews and updates this classification periodically as new deforestation data becomes available, so a country's risk category can change over time.

The EUDR applies to specified commodities and certain derived products, including cattle, cocoa, coffee, oil palm, rubber, soya and wood. Businesses exporting covered products may be required to demonstrate that their products are deforestation-free and produced in accordance with the laws of the country of origin.

While European sustainability laws may not apply directly to most small suppliers, their requirements are often reflected in customer contracts. As a result, suppliers may be asked to provide information on labour practices, environmental performance, supply-chain traceability and corrective measures

National authorities in each EU Member State are required to carry out risk-based checks on companies and on the products, they place on the market. The Regulation sets minimum annual check rates tied to the risk category of the country of production: at least 1% of relevant operators and traders for low-risk origins, 3% for standard-risk origins, and 9% (both by number of companies checked and by quantity of product) for high-risk origins. Checks may include document review, on-the-ground inspection, satellite monitoring, and, where necessary, laboratory or DNA analysis to verify a product's origin.

Each EU Member State must establish penalties for non-compliance with the EUDR. These may include fines, confiscation of non-compliant products and related revenues, temporary exclusion from public procurement and public funding, and, in cases of serious or repeated violations, a temporary prohibition on placing products on the EU market.

Companies exercising due diligence must retain the underlying information, evidence and due diligence statements for at least five years, and must make this documentation available to the competent authorities on request. Companies that are not small or micro enterprises must also publicly report annually on their due diligence system and the steps taken to comply with the Regulation

Although the EUDR applies directly only to products placed on, or exported from, the EU market, its effect extends to Indian producers and exporters of coffee, cocoa, rubber, wood, palm-oil-based goods, leather and other cattle-derived products, and soya, wherever these products move through EU supply chains. Indian exporters should expect their EU buyers and importers to increasingly request plot-level geolocation data, proof of legal production, and due diligence documentation as a condition of continued sourcing, notwithstanding India's current low-risk classification.

The EU Deforestation Regulation (EUDR) restricts the placing of certain commodities and products on the EU market unless they are deforestation-free and produced in accordance with the relevant laws of the country of production. To demonstrate compliance, operators are required to conduct due diligence and collect information such as geolocation data and supply-chain traceability records. The Regulation applies from 30 December 2026 for large and medium sized operators and 30 June 2027 for micro and small enterprises.

Yes. India regulates greenwashing through the Central Consumer Protection Authority (CCPA) Guidelines for Prevention and Regulation of Greenwashing or Misleading Environmental Claims, 2024, which require environmental claims to be truthful and capable of substantiation. In addition, misleading sustainability-related disclosures may attract liability under existing securities, company, and consumer-protection laws.