What Indian exporters must know about the EU’s new deforestation law

LiquidMind.AI | April 24, 2025

Indian exporters are facing a critical compliance deadline as the EU enforces its landmark Deforestation-Free Regulation (EUDR). Covering key commodities like coffee, cocoa, rubber, and soy, the law demands full traceability and proof of deforestation-free origins. With US$ 1.3 billion in Indian exports at stake, businesses must act now to meet the EU’s strict environmental standards—or risk being shut out of a vital market.

EUDR - Chatgpt

Image credit: Chatgpt

Indian exporters are preparing for a significant regulatory shift as the European Union rolls out its landmark Deforestation-Free Regulation (EUDR). Adopted as Regulation (EU) 2023/1115, the law is aimed at reducing the EU’s contribution to global deforestation and forest degradation by mandating strict traceability and legal compliance for key commodities entering the European market.

The regulation applies to seven key commodities coffee, cocoa, soy, rubber, palm oil, wood, and cattle and their derived products. Under EUDR, all such products must be verified as deforestation-free, meaning they are not produced on land that was deforested after 31 December 2020, and they must comply with the environmental and social laws of the country of origin.

Implementation timeline: A phased approach

Initially set to begin in 2024, the European Parliament and Council reached a political agreement in October 2023 to delay the regulation’s enforcement by one year, providing additional transition time. According to the revised timeline:

Large companies must comply by 30 December 2025

Small and Medium Enterprises (SMEs) must comply by 30 June 2026

The delay comes in response to feedback from industry stakeholders, including exporters from developing countries such as India, who cited technological and logistical readiness as key concerns.

India’s US$ 1.3 bn exposure to the EU market

According to data from the Economic Times, Indian exports worth nearly US$ 1.3 billion annually to the EU fall under the EUDR purview. These include agricultural and forest-based commodities with significant trade volumes and complex supply chains.

Commodity Sector	Export Value (USD million)
Coffee	720
Cocoa	180
Rubber	160
Soy	140
Wood	100
Total	1300

India is among the top ten suppliers of coffee and rubber to the EU. Compliance failures could lead to rejections at customs, legal actions, and market exclusion.

India-EU export trends: A decade in review

India’s exports to the EU have grown steadily over the past decade, reflecting the EU’s position as India’s second-largest trading partner. Despite a brief pandemic-induced dip in 2020, exports surged to US$ 98.9 billion in FY24, the highest in ten years.

Source: https://tradestat.commerce.gov.in/eidb/region_wise_export

This upward trajectory underscores the strategic importance of the European market for Indian producers, particularly in sectors impacted by EUDR such as agro-processing, textiles (wood-derived fibers), and rubber-based goods.

New reporting rules: What exporters must provide

To place goods on the EU market, exporters must submit a due diligence statement through a centralized EU information system. This must include:

Geolocation coordinates of the plot of land where the commodity was produced
Date of production to verify it does not fall within a post-2020 deforestation zone
Risk assessment and risk mitigation measures
Proof that the product complies with all relevant laws in the country of origin

Initially, these requirements were to be filled per shipment, but a recent Reuters report confirmed the EU will now accept annual reporting for consistent supply chains, easing administrative pressures for frequent exporters.

Challenges and Strategic Risks for Indian Exporters

Indian exporters face multiple challenges in aligning with EUDR. Many farms lack digitized land records, and geolocation tagging is not widely adopted, particularly among smallholder farmers. Moreover, collecting and verifying satellite-tagged land-use proof involves coordination between private exporters and public land registries, which remains underdeveloped in several states.

In multi-tiered agricultural supply chains, especially in coffee and rubber, tracing a product’s origin back to a single plot becomes nearly impossible without systemic investment in traceability infrastructure.

Compliance Automation: Turning Risk into Opportunity

The shift toward automated trade compliance is not just a necessity, it is a competitive edge. AI platforms now provide exporters with end-to-end solutions for EUDR compliance. These systems can integrate GIS land mapping along with auto-generated documentation, and real-time risk flags for exporters.

Automated compliance tools are crucial to ensure data accuracy, reduce manual errors, and maintain seamless connectivity with EU customs platforms. Moreover, by using AI for document generation and risk profiling, Indian exporters can cut costs and avoid regulatory penalties turning compliance into a value driver.

Prepare Now or Pay Later

The EU’s green trade policies are no longer distant rhetoric, they are enforceable law. For Indian exporters, EUDR represents both a challenge and an opportunity. Investing now in traceability, technology, and training can ensure market continuity and global competitiveness.

With proactive compliance and government-industry collaboration, India can lead the way in deforestation-free global trade and demonstrate sustainable credibility in one of the world’s most demanding export destinations.

Article authored by: LiquidMind.AI

Sources

What Indian exporters must know about the EU’s new deforestation law

Implementation timeline: A phased approach

India’s US$ 1.3 bn exposure to the EU market

India-EU export trends: A decade in review

New reporting rules: What exporters must provide

Challenges and Strategic Risks for Indian Exporters

Compliance Automation: Turning Risk into Opportunity

Prepare Now or Pay Later

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What Indian exporters must know about the EU’s new deforestation law

Implementation timeline: A phased approach

India’s US$ 1.3 bn exposure to the EU market

India-EU export trends: A decade in review

New reporting rules: What exporters must provide

Challenges and Strategic Risks for Indian Exporters

Compliance Automation: Turning Risk into Opportunity

Prepare Now or Pay Later

Leave a comment

Cancel reply

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