New Delhi (India), 2nd March 2023: An Indian Official on Wednesday stated that India is slightly concerned about the ‘Carbon Tax’ that the European Union has recently announced. This new development will force India to reassess its negotiations regarding the Free Trade Agreement with the EU.
In January of 2022 the European Union and India had resumed talks for a free trade agreement, investment protection and geographical indications. However with the implementation of this ‘Carbon Tax’ the negotiations will have to be reanalysed.
The Joint Secretary in the Department of Commerce, Nidhi Mani Tripathi said, “Apart from the sustainability and all other issues, we are also a bit, I would not say perturbed but we are feeling little challenged with the announcement of CBAM recently and it is going to cover 5-6 sectors which are key to Indian industry and supply chains,”
The EU is implementing the Carbon Border Adjustment Mechanism (CBAM) from the first of October this year. This will impose selective tax reaching upto 20-35% on certain imports into the EU. To this Tripathi said that because of these messed, “also require us to recalibrate our FTA (Free Trade Agreement) approach.”
