India has issued a stern warning to the European Union (EU) regarding its proposed Carbon Border Adjustment Mechanism (CBAM), which aims to levy carbon taxes on imports like steel, aluminum, and cement. Commerce and Industry Minister Piyush Goyal declared that India will impose retaliatory tariffs if the EU proceeds with this plan.
The CBAM is designed to tax imports based on their carbon emissions, potentially adding 20–35% in costs to Indian exports. Goyal criticized the measure as “very, very irrational” and emphasized that such unilateral actions could harm both economies. He stated, “If they put in a carbon tax… we will retaliate. It will hurt their own economy, and the retaliation will further hurt them.”
India advocates for equitable climate action, urging developed nations to share green technologies and provide financial support to developing countries. Goyal highlighted that imposing uniform carbon taxes disregards the principle of “common but differentiated responsibilities,” which acknowledges the varying capabilities and contributions of countries to climate change.www.ndtv.com
The EU plans to implement CBAM starting in 2026, affecting imports of high-carbon goods. India has raised objections during diplomatic engagements, emphasizing the potential negative impact on trade relations. Goyal expressed hope that “wiser sense will prevail” in the EU to avoid escalating trade tensions.
As global discussions on climate policy continue, India’s firm stance underscores the complexities of balancing environmental objectives with fair trade practices.
