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2w ago

India Warns EU and UK of Retaliation Over Carbon Border Taxes

Commerce Minister Piyush Goyal emphasizes India's low emissions and demands compensation under global climate equity principles.

'Some economy will have to go down...': Commerce Minister Piyush Goyal on energy transition challenge
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Overview

  • India has formally threatened to retaliate against the EU and UK over their Carbon Border Adjustment Mechanisms (CBAM), which could impose 20–35% tariffs on Indian exports starting in 2027.
  • Commerce Minister Piyush Goyal criticized the measures as unfair, citing India's low per capita emissions and adherence to the principle of 'common but differentiated responsibilities' (CBDR).
  • The EU CBAM will begin financial obligations in 2026, with full enforcement in 2027, potentially affecting $75 billion of Indian exports, including steel, aluminum, and cement.
  • The recently concluded India-UK free trade agreement lacks provisions addressing the UK's planned CBAM, which could impact $775 million worth of Indian exports.
  • India continues to negotiate free trade agreements with the EU and UK, aiming for completion by year-end, while reserving the right to impose countermeasures if CBAM duties harm its trade.