India and EU Engage to Find Solutions for Carbon Border Adjustment Mechanism
In a press conference following the inaugural India-EU Trade and Technology Council meeting held in Brussels, Commerce and Industry Minister Piyush Goyal addressed concerns regarding the EU's proposed Carbon Border Adjustment Mechanism (CBAM). Goyal emphasized that the intention behind the CBAM is not to hinder trade but to forge a way forward through constructive engagement. He assured that India and the EU are actively working together to identify the right solutions in this regard.
CBAM Impact on India's Steel and Aluminium Exports
The CBAM, scheduled to take effect from October, is expected to have repercussions on India's exports of steel and aluminium. Acknowledging the potential impact, Goyal expressed confidence in the extensive timeline available for collaboration between India and the EU to devise appropriate strategies and mitigate the adverse effects on Indian industries.
Misconceptions about India's Tariffs
Goyal addressed the issue of tariffs and clarified that India's tariffs are often misunderstood to be high on most raw materials or intermediates. He attributed the necessity for relatively high tariffs to India's need to compete with certain regions that lack transparency. These high tariffs on specific products have inadvertently affected developed countries, resulting in unintended consequences. To address these concerns, India is actively engaged in negotiations for a free trade agreement (FTA) with the European Union.
Leveraging Free Trade Agreement Negotiations
Goyal highlighted that India's tariffs are generally low on technological items that contribute to the growth of the Indian economy. Contrary to perception, the actual applied rates are considerably lower than the bound rates agreed upon at the World Trade Organization (WTO). The ongoing FTA negotiations with the EU present an opportunity to further lower trade barriers and facilitate greater access for Indian goods of high quality at competitive prices in the European Union market. This development will benefit consumers within the European Union.
By actively participating in the discussions surrounding the CBAM and leveraging FTA negotiations, India aims to find equitable solutions, promote fair trade practices, and foster enhanced economic cooperation with the European Union.