| CBAM • The CBAM is expected to come into force on January 1, 2026. • According to the Global Trade Research Initiative, India will be among the top eight countries adversely affected by CBAM. • In 2022, 27% of India’s exports of iron, steel, and aluminium products, worth $8.2 billion, went to the EU. • Core sectors like steel are expected to be greatly impacted by CBAM. |
- Economic Survey echoed concerns of Protectionism and noted that the European Union’s forthcoming Carbon Border Adjustment Tax (CBAT) contradicts the spirit of the Paris Agreement.
- The Carbon Border Adjustment Mechanism (CBAM) imposes tariffs on energy-intensive goods imported into the EU to prevent local manufacturers of iron, steel, and aluminium from being disadvantaged compared to goods produced in developing countries with more permissive fossil fuel emission norms.
- India faces the dual challenge of addressing climate change and dealing with the protectionism of developed countries.
- Europe is set to implement its Carbon Border Adjustment Tax, with the UK and the US also planning their versions.
- These taxes violate the Paris Agreement’s principle of “Common but Differentiated Responsibilities.”
Dig Deeper: Read about the EU’s other Sanitary and Phyto-sanitary measures.
