Will respond accordingly if UK imposes carbon tax: Piyush Goyal
What's the story
India's Commerce Minister, Piyush Goyal, has said that the country will respond suitably, if the UK imposes a Carbon Border Adjustment Tax (CBAM) on Indian exports. The statement comes after the Comprehensive Economic and Trade Agreement (CETA) signed between India and the UK, did not include any explicit provision regarding such a levy.
Trade stance
India is not weak, says Goyal
Goyal stressed that India is not weak and will respond appropriately to any non-tariff barriers on its trade. He said, "Carbon tax is getting postponed repeatedly, even European Union (EU) hasn't implemented yet." He also noted that the UK's CBAM is a concern for the EU's industry as it would raise Europe's export and manufacturing costs.
Tax implementation
UK plans to implement CBAM by 2027
The UK government plans to implement CBAM by 2027, a policy that would impose a cost on carbon emissions from imports. The tax's liability shall depend on the greenhouse gas emissions intensity of the imported product, and the difference between the carbon price in the country of origin (if any) and what it would have been if produced in UK.
Trade agreement
Free trade agreement does not mention carbon tax
While the UK's CBAM is set for 2027, India raised concerns during trade talks. The India-UK free trade agreement does not mention Britain's proposed carbon tax. However, if such a tax is imposed in the future and negates trade benefits for India under this deal, the nation will have the right to take steps to mitigate its impact on exports.
Export concerns
India's exports worth $775M could be affected
The GTRI think tank has warned that India's exports worth $775 million to UK could be affected by Britain's carbon tax on iron and steel, aluminum, fertilizer, and cement products from 2027. India had expressed serious concerns over this tax, calling it a trade barrier.