Commerce and Industry Minister Piyush Goyal has said that further study needs to be done on the impact of the European Union's India EU carbon border adjustment mechanism (CBAM) on enterprises on both sides, trade and the effect on consumers due to increased price of goods and services.
The CBAM is a carbon tariff on carbon-intensive products, such as steel and some electricity, imported by the European Union. It will take effect in 2026, with reporting starting in 2023.
Goyal held a bilateral meeting with the European Commissioner for Internal Trade, Thierry Breton on the sidelines of the first Ministerial meeting of India EU Trade and Technology Council in Brussels.
During the meeting, the two sides discussed the CBAM in detail. Goyal said that India is concerned about the impact of the CBAM on its domestic industries. He also raised concerns about the potential for the CBAM to lead to carbon leakage, as companies may move their production to countries with lower carbon prices.
Breton said that the EU is committed to working with India to address these concerns. He said that the EU is willing to consider exemptions for developing countries like India.
The two sides also discussed other issues of mutual interest, including digital trade, e-commerce, and investment. They agreed to continue their dialogue on these issues and to work towards a mutually beneficial trade and investment relationship.
- India is concerned about the impact of the EU's CBAM on its domestic industries.
- The EU is willing to consider exemptions for developing countries like India.
- India and the EU agreed to continue their dialogue on the CBAM and other trade and investment issues.
About the CBAM
The CBAM is a carbon tariff on carbon-intensive products, such as steel and some electricity, imported by the European Union. It is designed to prevent carbon leakage, which is the phenomenon of companies moving their production to countries with lower carbon prices.
The CBAM will be phased in over time. In the first phase, which will begin in 2023, companies will only have to report the emissions associated with their products. In the second phase, which will begin in 2026, companies will have to pay a carbon tariff on their products if they exceed a certain emissions threshold.
The CBAM is a controversial policy. Some argue that it is necessary to prevent carbon leakage and to protect the EU's climate goals. Others argue that it will raise the prices of goods and services, harming consumers and businesses.
The impact of the CBAM on India is still uncertain. However, it is likely to have a significant impact on India's domestic industries, particularly its steel and cement industries. The CBAM could also lead to higher prices for goods and services in India, harming consumers and businesses.
The European Union (EU) is planning to introduce a carbon border adjustment mechanism (CBAM) in 2026. The CBAM is a carbon tariff on carbon-intensive goods imported into the EU. The aim of the CBAM is to prevent carbon leakage, which is the phenomenon of companies moving their production to countries with less stringent climate regulations.
The CBAM will initially apply to a limited range of goods, including iron and steel, cement, aluminum, and electricity. The EU plans to gradually expand the scope of the CBAM over time.
The CBAM has been met with mixed reactions from businesses and governments around the world. Some businesses have expressed concerns that the CBAM will increase their costs and make them less competitive. Governments in some countries have also expressed concerns about the CBAM, arguing that it is a form of protectionism.
The EU has said that it is willing to work with other countries to ensure that the CBAM is fair and does not distort trade. The EU has also said that it is willing to provide financial assistance to help developing countries comply with the CBAM.