Climate Inaction Puts Indian Export Sectors at Risk of Major Losses

India's export sectors, particularly aluminium, iron, and steel, face escalating risks from climate change due to lack of action, threatening profits and sustainability. BCG reports that climate events could severely erode India's GDP by 2030 and impact businesses' long-term viability. EU regulations could further affect exports significantly.

India's export-oriented sectors, including aluminium and iron and steel, are increasingly vulnerable to international regulatory shocks and climate inaction, threatening their financial stability and longevity, according to a report by global consulting firm BCG.

India ranks among the top ten nations seriously affected by extreme weather, says the 'Climate Risk Index 2026' launched at COP30. Sumit Gupta, BCG's Managing Director and Asia Pacific Leader for Climate and Sustainability, highlights that India's procrastination on climate issues could result in severe economic consequences, jeopardizing 4.5% of GDP by 2030 and between 6.4% to over 10% by 2100, based on data from RBI and WEF 2024.

The EU's carbon border adjustment mechanism poses an estimated risk to USD 7.7 billion or 10-11% of India's exports to the EU, noted BCG Managing Director Anirban Mukherjee. Climate change impacts are evident, with physical infrastructure damages and productivity declines adversely affecting the supply chain, making the business landscape increasingly precarious.

(With inputs from agencies.)