EUROPE’S SUSTAINABILITY TURN AND THE NEW POLITICS OF TRADE REGULATION

“Europe speaks of sustainability but practices regulatory unilateralism; India, a civilisation anchored in ecological balance, is forced to prove what its traditions never violated.”

The European Union’s Deforestation Regulation (EUDR), scheduled for full enforcement in December 2025, represents one of the most far-reaching environmental trade regulations introduced by any major economic bloc in the 21st century. Although framed as a climate-driven instrument to curb global deforestation and forest degradation, the regulation’s implications extend far beyond environmental governance. For developing economies—particularly India, Indonesia, Vietnam, Brazil, Côte d’Ivoire, and other commodity-producing nations—the EUDR signals the emergence of a new architecture of regulatory power, where environmental norms and sustainability certifications increasingly shape market access, value chains, and commercial competitiveness (FAO, 2024; WTO Trade & Environment Review, 2023).

Historically, European forestry norms evolved through a deeply interventionist approach rooted in colonial resource extraction. The forest management practices instituted in Asia, Africa, and Latin America in the 19th and 20th centuries—including British India’s Indian Forest Act (1865; revised 1878, 1927)—reflected a model of centralized state control, commodification of forests, and displacement of community-based systems (Guha, 1989; Rangarajan, 1996). Ironically, many of the countries now regulated under the EUDR inherited fragmented, post-colonial forest governance systems precisely because of European interventions. Against this background, the new regulation marks not merely the EU’s push for ecological responsibility but its attempt to redefine the governance of global commodity chains in ways that reflect its own historical and market-driven imperatives (Pichler, 2023; European Commission, 2021).

The EUDR mandates that commodities such as cattle, cocoa, coffee, rubber, soy, palm oil, and timber—and derivative products—must be accompanied by stringent due diligence proofs demonstrating that they were not produced on land deforested after 31 December 2020. Non-compliance can lead to confiscation of shipments, suspension of access to the EU market, and substantial financial penalties. This places a disproportionate burden on smallholder farmers, micro-enterprises, and exporters in developing economies, which lack the centralized, technologically integrated traceability systems prevalent in European value chains (UNCTAD, 2024).

For India—whose trade relationship with the EU spans over six decades—the regulation presents a particularly complex challenge. India’s agricultural exports to the EU, worth approximately US$1.3 billion, include coffee, oil-cakes, leather, natural rubber, timber-based handicrafts, and allied products (DGFT, 2024). While India’s deforestation rate remains lower than Brazil and Indonesia on a per-capita basis, the absolute figure of 668,000+ hectares lost since 2015 places India in a comparatively vulnerable category (Global Forest Watch, 2023). These metrics risk being interpreted unfavourably under EU sustainability criteria, despite the socio-economic and historical context of India’s forest transition pathway.

As European environmental diplomacy becomes increasingly tied to market regulation, the EUDR also reflects the broader shift in global governance where Western powers, facing declining manufacturing dominance, leverage normative instruments—such as carbon border adjustments, green supply chain directives, and sustainability certifications—to maintain influence over global production systems. Scholars term this evolving phenomenon “regulatory neo-mercantilism” or “green protectionism,” where climate-oriented policies indirectly reinforce geopolitical advantage (Mehling, 2022; Cosbey, 2023).

India’s challenge, therefore, is twofold:

Mitigating immediate trade disruptions for smallholders and SMEs through traceability, digitalization, and coordinated regulatory compliance; and

Positioning itself diplomatically to contest unilateral sustainability standards at the WTO, G20, and Indo-Pacific frameworks, while simultaneously building its own green value-chain leadership.

From a broader diplomatic lens, India must also recognise that the EUDR is not a standalone regulatory instrument but part of the EU’s wider normative agenda—what Ian Manners famously termed “Normative Power Europe”, the EU’s self-image as a moral arbiter of global standards (Manners, 2002). India’s historical relationship with this European norm-exporting machinery has always oscillated between cooperation and caution. Whether it is the Generalised System of Preferences (GSP), the GDPR, the Carbon Border Adjustment Mechanism (CBAM), or now the EUDR, an unmistakable pattern is visible: European standards increasingly externalise European regulatory preferences onto trading partners, effectively reshaping the very structure of global value chains.

“Modern environmental norms often echo colonial-era extractive rules: the West sets the standards; the developing world pays the price.”

India’s Strategic Dilemma: Adaptation vs. Assertiveness

“The EUDR is less about protecting forests and more about protecting markets. Behind the veneer of green virtue lies an old geopolitical instinct — preserve Europe’s advantage.”

In the post-colonial decades, India was often wary of regulatory conditionalities from European capitals, viewing them as veiled instruments of economic leverage (Sarma, 1999; Pant, 2012). Today, the dilemma is subtler but sharper:

Should India adapt to these new green standards to capture premium markets, or challenge them diplomatically as non-tariff barriers that disproportionately burden developing economies?

This question becomes especially crucial when the EUDR’s disproportionate impact on smallholders is considered. Historical analogies abound. During the Uruguay Round negotiations in the early 1990s, Indian diplomats had warned against the “sanitised protectionism” embedded within SPS and TBT norms (Bhagwati, 1991; Das, 1998). The EUDR could emerge as a modern version of that same phenomenon, cloaked in environmental virtue but structurally unequal in its application.

South–South Coordination as a Diplomatic Pathway

Here lies one of India’s biggest diplomatic opportunities. For decades, India has positioned itself as a leader of the Global South—whether through the G77, IBSA, BRICS, or the WTO’s developing-country coalitions. Several of the EUDR-hit countries—including Vietnam, Uganda, Côte d’Ivoire, Ghana, and Indonesia—share India’s concerns.

This creates a diplomatic window for:

• A coordinated Global South response at the WTO Committee on Trade and Environment

• Calls for the EU to provide transition financing to smallholder-dominant economies

• Bilateral green partnerships that recognise local agricultural diversity

• An inter-regional coalition between ASEAN, AU, and India on sustainable supply-chain financing

Historical precedent exists. India’s coalition-building against TRIPS-plus norms in the 2000s profoundly influenced global IP debates (Correa, 2010). Similarly, the Basic Group coordination (India–China–Brazil–South Africa) shaped the global climate negotiations in Copenhagen and Paris (Dubash, 2013).

The EUDR may become yet another arena where India’s coalition-building prowess determines the eventual structure of compliance frameworks.

India’s Domestic Governance Shift: A Historical Perspective

Long-term compliance with the EUDR also demands that India rethink its fragmented land-governance system. Colonial-era forest laws—including the 1865, 1878 and 1927 Acts—created centralised control but weak record-keeping, a patchwork that persists even today (Guha, 1989; Gadgil & Guha, 1995). Land-use records across major agricultural belts remain inconsistent, owing to diverse state-level regulations and historical administrative differences.

India’s efforts toward Digital Land Records Modernisation, PM Gati Shakti, and Agristack represent the largest structural overhaul of this system since Independence. If successfully integrated into traceability systems:

• AgriStack can automate farm-to-port traceability

• GIS-based Forest Survey of India mapping can serve as proof of non-deforestation

• Drone-based digital crop surveys can create micro-level land-use baselines

Such systemic overhauls echo India’s broader transition from regulatory opacity to digitised governance—visible in GST, FASTag, JAM trinity, and the upcoming National Geospatial Policy reforms.

Role of Private Sector and Tech Diplomacy

India’s technological ecosystem, especially agritech start-ups, is uniquely positioned to support compliance. The disruptive potential of:

• blockchain-based commodity tracing

• AI-driven farm analytics

• remote-sensing verification

• mobile-based land geolocation apps

can accelerate green compliance dramatically.

Historically, private sector-driven innovation has repeatedly lifted Indian sectors facing global regulatory pressure—such as pharmaceutical traceability reforms after the US FDA tightening in the 2010s (Chaudhuri, 2016).

A similar wave is now required in agriculture, plantations, and forest-linked value chains.

EUDR as an Entry Point into High-Value Green Markets

Paradoxically, the EUDR may actually open new doors for India:

1. Premium positioning in EU markets as a “low-risk” supplier

2. Expansion into high-value organic, sustainable, and certified niche markets

3. Opportunity for India to export green-tech, traceability systems, and sustainability services

4. Leveraging India–EU Trade and Technology Council (TTC) for green-market advantage

If India successfully designs a transparent, scalable, and inclusive traceability architecture, it can not only secure existing exports but also gain market share from competitors like Côte d’Ivoire, Vietnam, and Brazil.

Diplomatic Leverage: India’s Civilizational Ethos of Ecological Balance

A powerful narrative advantage also lies in India’s civilizational framing of environmental stewardship. From the Vedic principle of “prakriti-raksha” to Emperor Ashoka’s edicts banning forest destruction, India’s ecological ethics predate modern environmentalism by millennia (Thapar, 2002; Radhakrishnan, 1996).

This civilizational continuity gives India a persuasive argument:

its environmental approach is indigenous, not externally imposed.

Such framing has often strengthened India’s voice in global climate negotiations. It can now be deployed to push for equitable sustainability norms under the EUDR.

Conclusion: A Defining Test for India’s Agricultural Diplomacy

The EUDR represents a defining test—of India’s regulatory agility, technological capability, and diplomatic finesse. If India fails to adapt, the consequences could be severe:

• marginalisation from high-value EU markets

• pressure on millions of smallholder livelihoods

• fragmentation of export-oriented value chains

But if India adapts strategically, the EUDR becomes an unlikely opportunity:

to modernise agricultural governance, strengthen smallholder capacity, and establish India as a global leader in sustainable supply chains.

“India’s challenge is not merely compliance, but resisting a new architecture of eco-protectionism that threatens its farmers and export competitiveness.”

Actionable Roadmap for India’s Strategic Response to EUDR

1. National-Level Institutional Reforms

• Establish a National EUDR Compliance Mission (NECM) under the Ministry of Commerce with representation from MoEFCC, Agriculture Ministry, APEDA, TRIFED, and state forest/agriculture departments.

• Create a unified national “Green Traceability Authority (GTA-India)” to standardise protocols on geolocation, land-use verification, certification, and due-diligence documentation.

• Launch an India-wide “Deforestation-Free Agriculture Policy” aligned with EUDR benchmarks but tailored to Indian socio-economic constraints.

• Integrate forest-governance databases (FRA data, Forest Survey of India satellite datasets, state-level revenue records) into a single interoperable GIS platform.

2. Farmer-Level Interventions

• Digitally onboard all smallholder farmers using PM-Kisan database + geotagged land records through state agriculture departments.

• Provide subsidised GPS mapping of farmland through Krishi Vigyan Kendras (KVKs) and FPOs.

• Introduce a “Smallholder Green Transition Fund” offering micro-grants for compliance tools, certification, and audits.

• Ensure every FPO maintains a digital ledger of farm-to-mandi pathways to create traceable lot histories.

• Mandatory training modules on traceability, climate-smart agriculture, and deforestation norms—delivered through mobile vernacular apps.

3. Supply Chain & SME Strengthening

• Develop state-led digital supply-chain dashboards, enabling exporters to map the movement of coffee, rubber, soy, leather, woodcraft and other EUDR-linked commodities.

• Mandate EUDR-compliant procurement standards for APMC mandis and private buyers.

• Launch a national “Sustainable SMEs Accelerator” offering concessional finance, IT support, cloud-based traceability tools.

• Encourage consortium-based certification, allowing clusters of SMEs to jointly fund audits and digital infrastructure.

• Link MSME Ministry’s ZED sustainability certification with EUDR requirements.

4. Technology Deployment

• Adopt blockchain-based provenance tools for multi-stakeholder commodity chains involving mandis, transporters, and processors.

• Integrate ISRO’s high-resolution satellite data to authenticate non-deforestation claims.

• Develop an “India Green Ledger” mobile app that automatically generates EUDR-compliant Due Diligence Statements for exporters.

• Use AI-based anomaly detection to flag suspicious land-use changes, illegal felling, and supply-chain irregularities.

• Partner with NIC, C-DAC, and private AgTech firms for national-level deployment.

5. State-Level Responsibilities

• State forest departments must publish annual land-use change datasets in open digital format.

• Create district-level EUDR Facilitation Centres to serve as single-window helpdesks for farmers and SMEs.

• Standardise land records and digitise historical maps across all states, especially those with high-value EUDR commodities (Karnataka, Kerala, Maharashtra, Tamil Nadu, Andhra Pradesh, Northeast states).

• Issue state-level green export certifications using verified GIS coordinates.

6. Diplomatic & Trade Strategy

• Activate a dedicated Indo-EU Sustainability Dialogue focusing on:

  
  

  • transitional compliance timelines

  • flexible documentation for fragmented supply chains

  • recognition of India’s low-risk classification

  
  

• Push for “Mutual Recognition Agreements” for Indian digital traceability platforms.

• Highlight India’s historical forest-conservation ethos (e.g., Bishnoi movement, Chipko movement, ancient ecological ethics) as part of climate diplomacy.

• Negotiate for phased implementation and technical/financial assistance for smallholder-heavy economies.

• Build a coalition with the Global South (ASEAN, African Union, MERCOSUR) to argue for more inclusive and development-sensitive EUDR frameworks.

7. Forest Governance & Monitoring

• Enhance Forest Survey of India (FSI) reporting frequency from biennial to annual or real-time.

• Use drone-based monitoring for forest-fringe agricultural zones.

• Strengthen enforcement against illegal timber extraction, especially in Northeast and central India.

• Expand Joint Forest Management Committees to include revenue-sharing incentives for compliance.

• Develop “Hotspot Risk Maps” identifying districts with the greatest EUDR vulnerability.

8. Export-Sector Adaptation

• Coffee → Establish estate-to-export traceability; GIS-mapping of all coffee estates in Karnataka, Kerala, Tamil Nadu.

• Soybean → Create cluster-level digital mandis; promote identity-preserved supply chains.

• Leather → Certify cattle-source traceability; digitise slaughterhouse-to-tannery records.

• Rubber → Link Rubber Board’s digital platform with EU-compliant geolocation services.

• Woodcraft & handicrafts → Implement species-level tracking, verified felling permits, and artisan-level compliance.

• Oilseed & cocoa → Develop cooperative-based monitoring networks.

9. Financial Architecture

• Green Transition Credit Lines through NABARD, SIDBI, EXIM Bank, and IFC.

• Offer 30–40% subsidies for digital traceability infrastructure for SMEs.

• Launch Sustainability-Linked Bonds for high-export commodity states.

• Provide tax incentives for exporters meeting or exceeding EU compliance standards.

• Crowd-in CSR funds for training, capacity-building, and digital literacy.

10. Research, Data & Academia Partnerships

• Create a National EUDR Research Consortium involving ICRIER, IFPRI, TERI, IIMs, IISERs, and agricultural universities.

• Commission annual white papers on India’s deforestation trends, supply-chain risks, and compliance progress.

• Fund indigenous research on low-cost, smallholder-friendly traceability technologies.

• Build India’s own “Deforestation Benchmarking Index” to negotiate with the EU from a data-backed position.

11. Communication & Social Awareness

• Launch a national information campaign on sustainable farming and traceability requirements.

• Create multilingual training content for farmers in Hindi, Tamil, Telugu, Bengali, Marathi, Kannada, Malayalam, Odia, Assamese.

• Use Doordarshan and Krishi Channels to disseminate compliance knowledge.

• Develop WhatsApp-based helplines for real-time farmer assistance.

12. Strategic Outcomes Expected

• Securing India’s US$1.3 billion agricultural export market to the EU.

• Upgrading India into a premium, deforestation-free supplier in global value chains.

• Enhancing India’s climate leadership credentials in the G20 and Global South.

• Improving incomes of smallholder farmers through access to high-margin markets.

• Strengthening India’s long-term position in green trade diplomacy.