The government on Saturday said that India was not afraid of issues like the carbon border adjustment mechanism and would deal with them when required.India may also consider taking away certain concessions granted under the India-UK Comprehensive Economic and Trade Agreement if the UK imposes non-tariff barriers like the carbon border adjustment mechanism (CBAM), a government source said on Friday.Union Commerce Minister Piyush Goyal said that he was a vocal critic of CBAM, and even European traders had privately thanked him for this criticism.”Carbon border adjustment mechanism is a non-issue. It is anyway being postponed. The EU has also not imposed it yet, nor has the UK. In fact, Europe is also worried that it will make infrastructure, housing, and manufacturing costs high. So even Europe is concerned about CBAM,” he said after India and the UK signed a historic Free Trade Agreement.The UK is scheduled to implement CBAM in 2027 to address carbon leakage and support the country’s decarbonisation goals.Under this, those exporting goods to the UK will have to report the carbon content of the commodity, based on which they will be taxed.The source said that India raised the issue of CBAM during the free trade agreement negotiations.However, it was not made part of the agreement as the UK side conveyed to Indian officials that the CBAM did not yet exist.New Delhi and London have also agreed that the former will have freedom to re-balance trade benefits if the CBAM negates trade benefits of India under the agreement, they added. “…we will also have the right to take counterbalance measures. India can take away concessions, and there will be a mechanism for that,” the source said.Once implemented, the CBAM would impact India’s steel, iron, and aluminum exports to the UK. According to the Ministry of Commerce, the India-UK FTA commits “immediate and full” tariff elimination for aluminum, iron, and steel products. Earlier, the tariffs were as high as 10%.”The combined UK import demand for steel and products of iron and steel is $18.46 billion. India currently supplies only $887 million, which is 4.8% of the UK’s total import demand. Even capturing 30–40% of the UK’s import share could push exports close to the $7.5 billion target,” the government said.India and the UK on Thursday signed a free trade agreement that will eliminate tariffs on 99 percent of Indian exports, open new markets for British whisky and automobiles, and create thousands of jobs in both nations. India-UK CETA negotiations started in January 2022.The agreement aims to double the bilateral trade between the two countries from $56 billion by 2030. The UK is among India’s top 10 export destinations. India had exported goods worth $14.55 billion in 2024-25 (Apr-Mar), and had imported $8.61 billion worth of goods in the year, according to data available with the commerce ministry.
Not afraid of carbon-border tax like issues: Piyush Goyal
