What CSRD Actually Means for Indian Companies Supplying Europe

The EU's Corporate Sustainability Reporting Directive came into force in 2024, and most Indian companies have filed it under "not our problem." The logic seems straightforward: CSRD is an EU directive, Indian companies are not EU-incorporated, and therefore it does not apply.

That logic is incomplete. CSRD's value chain disclosure requirements mean that large EU companies reporting under the directive must account for sustainability impacts, risks, and opportunities across their supply chains, including their Tier 1 suppliers. For Indian companies in textiles, pharmaceuticals, auto components, IT services, and chemicals that supply European clients, this is not a future consideration. The data requests are already arriving.

This piece explains what CSRD requires, how it reaches Indian suppliers, what EU clients will specifically ask for, and what Indian companies should do to get ahead of it.

The Corporate Sustainability Reporting Directive replaced the EU's earlier Non-Financial Reporting Directive and significantly expanded both the scope and the rigour of sustainability disclosure requirements. It mandates reporting under the European Sustainability Reporting Standards which is a set of 12 topical standards covering Environment, Social, and Governance dimensions. Double materiality is mandatory under CSRD: companies must assess both how ESG issues affect the business financially, and how the business's operations affect people and the planet.

The phase-in timeline is important to understand. Large EU companies and EU-listed entities came into scope from financial year 2024. Listed SMEs follow from 2026. Non-EU companies with significant EU revenue (above 150 million euros) come into scope from 2028 under the third-country provisions. Most Indian companies will not hit that revenue threshold, but they do not need to. Their EU clients already do.

This is where the value chain clause becomes critical. ESRS (the reporting standards under CSRD) require EU companies to identify and disclose material sustainability impacts, risks, and opportunities across their entire value chain. That explicitly includes upstream suppliers. A German automotive manufacturer, a French luxury retailer, a Dutch pharmaceutical company; any large EU entity now has a regulatory obligation to understand and report on what is happening in their supply chains. Indian suppliers are part of those supply chains.

The EU Corporate Sustainability Due Diligence Directive, commonly called CSDDD, sits alongside CSRD and goes further still. Where CSRD creates reporting obligations, CSDDD creates due diligence obligations requiring EU companies to actively identify, prevent, and address human rights and environmental risks across their supply chains. For Indian suppliers, this means their EU clients are not just asking for data. They are conducting active assessments of supplier practices.

EU companies under CSRD are already conducting supplier ESG assessments, sending questionnaires, and building supplier data collection programmes. These are not voluntary information requests but EU companies need this data to complete their own regulatory disclosures. Ignoring or delaying a response is not a neutral act; it signals to the client that the supplier cannot meet emerging expectations.

The data points most commonly requested from suppliers at this stage include greenhouse gas emissions across Scope 1 and 2, energy consumption by source, water usage and stress exposure, waste generation and disposal methods, workforce data including headcount, wages, and working hours, labour practice policies and grievance mechanisms, and anti-corruption compliance documentation. As EU companies mature their CSRD reporting, the depth and frequency of these requests will increase.

CSRD does not have Indian companies in its legal scope. But it has them firmly in its practical scope through every supply chain relationship that touches Europe. The question is not whether data requests will come. For many Indian exporters, they already have. The question is whether the company can respond in a way that strengthens the client relationship or one that raises a flag.

Indian companies that build ESG reporting capability now; starting with a GHG inventory, reviewing labour practices, and understanding what their EU clients are required to disclose, will be better positioned commercially, not just better prepared for compliance. ESG Astraa works with Indian exporters and listed companies to assess CSRD supply chain exposure and build the data infrastructure to respond.