India plans to challenge EU carbon tax at WTO

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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