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.

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.