India plans to challenge EU carbon tax at WTO

According to government and industry sources, India is planning to lodge a complaint with the World Trade Organisation about the European Union‘s proposal to levy tariffs ranging from 20% to 35% on high-carbon goods like steel, iron ore, and cement from India.

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India plans to challenge EU carbon tax at WTO: Key Points

● This move comes as part of New Delhi’s effort to resist the EU’s Carbon Border Adjustment Mechanism (CBAM), a measure intended to incentivize local industries to adopt cleaner technologies to reduce carbon emissions, while also being discussed in bilateral talks.
● The government planned to file a complaint with the WTO against the EU’s unilateral decision and intended to seek relief for exporters, especially small businesses. No additional information was provided.
● Another official, who was part of the WTO team, conveyed that India viewed the proposed tariff as a trade barrier and discriminatory.
● They plan to question its legality, citing India’s adherence to the protocols pledged in the U.N. Paris climate agreement.

Why India plans to challenge EU carbon tax at WTO?

India’s trade minister Piyush Goyal is currently in Brussels to discuss trade and address other bilateral issues with EU leaders.
In response, EU trade chief Valdis Dombrovskis stated that the CBAM was designed in compliance with WTO regulations, applying the same carbon price to both domestic and imported products.
The EU has recently approved a plan to impose the world’s first carbon levy on high-carbon goods imports, aiming to become a net zero emitter of greenhouse gases by 2050, which is ahead of India’s target of 2070.

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