A survey of the biocarbon reserve in Manas Tiger Reserve conducted by The Energy Research In stitute (TERI) has put the spotlight on carbon trading in the northeast region. Informed debates and discussions on opportunities and challenges of carbon credits and trade are necessary to articulate the framework of carbon trading mechanisms in the region. The talk of establishing a carbon credit market has gained momentum in India after the Parliament passed the Energy Conservation (Amendment) Bill, 2022, which seeks to tap the multi-billion-dollar global carbon market. The Trade Promotion Council of India data show that India has generated 30 million carbon credits which are the second-highest transacted volume in the world, and the country is also the largest exporter of carbon credits. The Central government has announced its plans not to export carbon credits till the commitments under the Nationally Determined Contributions (NDC) to the international community under the Paris Agreement are met. India has committed to creating an additional carbon sink of 2.5 billion tonnes to 3 billion tonnes of carbon dioxide equivalent through additional forest and tree cover by 2030 following the Nationally Determined Contribution (NDC) to the international community under the Paris Agreement. The sink sequesters carbon from the atmosphere. A carbon credit is a mechanism to reduce greenhouse gas emissions and the government allows certified carbon credits to registered companies that also set the limit of emission the companies are allowed against the credits. They need to buy carbon credits from other companies for emissions beyond the limit for which their carbon credits. The companies having surplus carbon credits that remain from the allotments made by the government are allowed to sell those credits to companies that exceed emissions beyond allotment. Buying carbon credits disincentivises greenhouse emissions and selling surplus credits incentivise capping the emission limit and that is how the carbon credit market creates the pathway to net zero carbon emissions and slow down global warming. India State of Forest Report (ISFR) 2021 states that over the last five biennial assessments the carbon stock of the country has increased from 6663 million tonnes in 2011 to 7204 million tonnes in 2021 assessment. The maximum carbon stock of 2177 million tonnes is stored in tropical dry deciduous forests followed by 1,303 million tonnes in tropical moist deciduous forests and 686 million tonnes in the semi-evergreen forest. Arunachal Pradesh has the maximum carbon stock of 1023 million tonnes followed by Madhya Pradesh at 609 million tonnes. The ISFR 2021 data show that Assam has 271 million tonnes of carbon stock. Total forest cover in the northeast region is 64.66 per cent of its total geographic area and these data are indicative of the importance of the region in carbon trading under the new energy conservation regime which the amended law seeks to establish. Launching of the 'Tree Outside Forest in India' programme by the Assam Government and US Agency for International Development in the state is aimed at rapidly increasing tree cover outside the traditional forest to enhance carbon sequestration and leveraging the private sector in the country to promote tree-based industries and trade carbon credits to create livelihoods. The ease of Doing Business approach of the central and the state governments, however, has pushed the ecologically fragile region to a crossroads of conservation regime and accelerated developments and this puts a question mark on the sustainability of carbon sequestration in natural forests as well as planted forest due to diversion and loss of forest cover to facilitate development projects. Sequestered carbon is stored in the forest in the form of Above Ground Biomass, Below Ground Biomass, dead wood, litter and soil organic carbon. The provision in the amended Energy Conservation Act prescribing the replacement of imported fossil fuel sources by renewable sources or non-fossil fuel sources made in India is expected to accelerate the establishment of the domestic carbon credit market. The domestic industries will have to generate and buy carbon credits, but more clarity is needed on the mechanism for carbon trading regulation. More importantly, the communities in the northeastern region getting due benefits from carbon trading will be crucial for building their trust in the regulatory mechanism and their participation in forest and biodiversity conservation for climate change mitigation and dealing with the problem of global warming on account of rising greenhouse gas emissions. Ensuring that the communities growing trees outside traditional forests get their legitimate share of carbon credits that are traded is an essential requirement for transparency. While talk of carbon credits and trade catches the imagination of environmental consultants, private players, project developers, project funding agencies and companies, and carbon offset providers, it has not created much enthusiasm in the region due to the absence of informed discussion. Decoding the complex carbon credit generation, allotment and trade for the layperson are critical to achieving the goals of emission reduction.