The European Union's Carbon Border Adjustment Mechanism will impose additional 25% tax on energy-intensive goods exported from India to the EU, a new report said on Wednesday.
This tax burden would represent 0.05% of India's GDP, according to the report titled 'The Global South's response to a changing trade regime in the era of climate change' by independent think tank Centre for Science and Environment.
-
Indian Markets Turning Corner After Two Tough Years, Says Sandeep Tandon -
NDTV Profit Ignite 2026: Experts See Opportunity In Equities, Stay Bullish For Long-Term -
Buy Right, Sit Tight Does Not Work for Individual Stocks, Says Dinshaw Irani -
'Worst Is Behind': Quant MF Sees Market Bottom, Flags 'Extreme Euphoria' In Midcaps -
India's Mutual Fund Industry Could Become A $1 Trillion Opportunity, Say Fund Managers -
'Foreign Investors Are Baraatis': Raamdeo Agrawal's Take On LTCG Tax -
Stay Invested Through Market Cycles: Raamdeo Agrawal at NDTV Profit Ignite -
Ramesh Damani Remains Bullish On India For Next 20-30 Years, Sees Bargains Amid Market Weakness -
CAS Came After A Long Consultation Process: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFIT IGNITE -
Aim To Cut FPI Onboarding Time From Mth To Five Days: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFI
These findings are based on data from the past three years—2021-22, 2022-23, and 2023-24.
CBAM is the EU's proposed tax on energy-intensive products, such as iron, steel, cement, fertilizers, and aluminum, imported from countries like India and China. The tax is based on the carbon emissions generated during the production of these goods.
The EU argues that this mechanism creates a level-playing field for domestically manufactured goods, which must adhere to stricter environmental standards, and helps reduce emissions from imports. But other nations, particularly developing countries, are worried this would harm their economies and make it too expensive to trade with the bloc.
The move has also sparked debate at multilateral forums, including UN climate conferences, with developing countries arguing that, under UN climate change rules, countries cannot dictate how others should reduce emissions.
Avantika Goswami, who leads CSE's climate change programme, said that India's CBAM-covered goods exports to the EU accounted for 9.91% of its total goods exports to the bloc in 2022-23.
She said 26% of India's aluminum and 28% its iron and steel exports were destined for the EU in 2022-23. These sectors dominate the basket of CBAM-covered goods shipped from India to the EU.
In 2022-23, the exports of CBAM-covered goods to the EU made up about one-fourth—25.7%—of India's total such goods exported globally, which is significant for the industries operating in these sectors.
Currently, hydrogen and electricity are not exported from India to the EU.
Of India's total goods exported worldwide, CBAM-covered goods exports to the EU constitute only about 1.64%.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.