India expresses concerns over EU's carbon tax

India has expressed its apprehensions to the European Union regarding the Carbon Border Adjustment Mechanism (CBAM).

Key-highlights

The issue was discussed at the India-EU Trade and Technology Council’s ministerial meeting in Brussels.
The meeting also saw India and the EU agreeing to ink a Memorandum of Understanding for cooperation in the semiconductor sector.
- India and the United States had on March 10 signed MoU to pave the way for joint projects and technology partnership for manufacturing semiconductors.

India-EU

India-EU trade reached a historical high, with €120 billion worth of goods traded in 2022.
India and the European Union have set ambitious goals of achieving net zero emissions by 2070 and 2050, respectively.
They have also made commitments to halt and reverse biodiversity loss by 2030 and to promote a circular economy.

Brief of CABM

The CBAM initiative proposed by the EU aims to levy 20%-35% taxes on carbon-intensive goods exported to any of its 27 member nations starting from January 2026.
It imposes importers and non-EU manufacturers to pay for the carbon emission linked to the goods they sell within EU limits.
Starting January 2026, the Indian steel, cement, aluminium, and fertiliser industries will pay steep Carbon Border Tax (CBT) imposed by the European Union (EU).
The CBAM will walk on the footprints of ETS, i.e., importers will be required to purchase carbon import certificates/ permits for each metric ton of CO2 brought into the EU through specified goods.