Tamil Nadu, Jan 8 (KNN) Tamil Nadu's small and medium enterprises (MSMEs) are set to encounter challenges due to upcoming European Union regulations penalizing companies for their carbon footprint.

Hans Raj Verma, CMD of Tamil Nadu Industrial Investment Corporation (TIIC), highlighted that these regulations, starting from 2026, will erode the cost advantage for Indian suppliers in the global supply chain.

Measures such as the EU Deforestation Regulation and cross-border carbon policies will impose additional levies based on product carbon weight.

The impact extends to shipping, making imports from cheaper locations uncompetitive for EU companies.

Verma emphasised the need for home-grown, low-cost sustainability solutions, citing TIIC's collaboration with IIT Madras for energy-efficient practices.

While some view these regulations as unfair trade practices, initiatives like turning industrial training institutes into Industry 4.0 technology centers offer MSMEs the chance for rapid skill upgrades.

The state government's partnerships and training programs aim to enhance export capabilities, crucial for maintaining competitive margins.

(KNN Bureau)