The UK authorities in December 2023 determined to implement its Carbon Border Adjustment Mechanism (CBAM) beginning 2027.
By not securing a carve-out or exemption clause on CBAM (carbon border adjustment mechanism), India misplaced an important alternative to
defend its carbon-intensive exports, the International Commerce Analysis Initiative (GTRI) Founder Ajay Srivastava mentioned.
“From January 2027, the UK can impose carbon taxes on Indian metal and aluminum, at the same time as we grant UK items duty-free entry. That is a severe asymmetry. Anticipate the identical remedy in India's commerce settlement with the EU,” he mentioned.
The GTRI in Might acknowledged that India's exports value USD 775 million to the UK could also be impacted resulting from Britain's determination to introduce a carbon tax on merchandise resembling iron and metal, aluminium, fertiliser, and cement, from 2027. The UK, after the European Union (EU), would be the second financial system to implement CBAM. The tax will initially give attention to sectors like iron, metal, aluminum, fertiliser, hydrogen, ceramics, glass, and cement. This tax might vary from 14-24 per cent. India has earlier flagged severe considerations over this tax, terming it a commerce barrier.
An official has mentioned that New Delhi has preserved its proper to retaliate or rebalance concessions, if future measures influence home exports.
