India's CCTS Has Price Bands, But Who Will Set the Carbon Price?

A carbon market sounds like it should produce a single, clear carbon price. In practice, India's CCTS has a price band, not a price, and reporting indicates the band's own edges were still unset as of the most recent update available.

CERC's 2026 regulations describe the mechanism clearly: a floor price, a forbearance price, and exchange-based discovery in between. What they have not yet done, based on the sources reviewed, is publish the actual numbers.

This guide explains how the price band is meant to work, who sets it, what happens inside it, and why liquidity is the real determinant of whether it produces a meaningful carbon price in India.

CERC's regulations set two bounds for compliance-market trading: a Floor Price, the minimum, and a Forbearance Price, the maximum. Both are proposed by BEE and approved by CERC.

Inside that band, the market price is meant to be discovered through exchange-based trading processes approved by CERC, not fixed by the regulator directly. The Commission's role is to set the boundaries and to oversee the process, not to declare a price.

A band rather than a single fixed price serves two purposes. The floor protects against the price collapsing toward zero in a thin early market. The forbearance price caps the maximum cost an entity faces for falling short of its target, giving it a predictable upper bound.

As of the most recent dated reporting reviewed, from 19 April 2026, the specific floor and forbearance figures had not yet been published, making this the single most consequential open question in the market's design so far.

The mechanism for discovering a carbon price is designed, with clear roles for BEE, CERC and the exchanges. The two numbers that bound it, however, were not yet public as of the most recent reporting reviewed, which is a meaningful gap for anyone trying to price compliance risk today.

Watch for CERC's formal notification of the floor and forbearance prices as the next concrete milestone, rather than relying on informal estimates in the meantime.