Will figure out a way to equalize domestic taxes with the CBAM of the EU: Piyush Goyal

 Will figure out a way to equalize domestic taxes with the CBAM of the EU: Piyush Goyal

He remarked, "They may soon recognize that and drop CBAM as the proposal is ill-conceived as well as does not address complete issue correctly and fairly," claiming that the Europeans had "shot themselves in the foot" with CBAM.

India is developing a domestic carbon tax along the lines of the European Union's Carbon Border Adjustment Mechanism (CBAM), which at first will aid the nation in transitioning to green energy while reducing its carbon footprint, Commerce Minister Piyush Goyal said on November 2. The minister stated that the world has not yet accepted India's responsibility for the transition to green energy.

In the event that a country that exports imposes local taxes on carbon emissions, there won't be an extra CBAM charge. Therefore, it will assist our exporters in reducing our carbon footprint if we collect the tax in India and utilize it for our transition to green energy. At the first Energy Transition Dialogue hosted by the ORF, the Union minister said, "We are working on establishing a solution around internal tax to take care of equating with European taxation on carbon emissions."

The EU adopted the Carbon Budget Adjustment Mechanism (CBAM) to set a "fair" price for carbon emissions from the manufacture of goods deemed carbon-intensive that are imported from non-EU nations. Higher import tariffs will be the result, and they will take effect in January 2026.

Cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen are among the products covered by CBAM; however, in the case of India, the industries most affected may be iron and steel and aluminium.

According to a study by the Delhi-based research organization Global Trade Research Initiative, exporters from these two industries may have to pay an extra 20–35 percent in import duties if their carbon emission compliance cannot be proven.

According to Goyal, India and the EU are having discussions over CBAM. "We are talking to them as to how carbon have a price at the same level in India as it is being charged in the EU," he said.

The minister criticized the industrialized nations for not fulfilling their pledge to provide $100 billion in climate funds to the poor countries.

"At the Paris Climate Conference, we all decided that various countries would have varying degrees of responsibility according to the amount of carbon emissions they contribute. Since they were the original polluters, they had pledged a sum of $100 billion," he said.

"Given the principle of polluter pays, it was anticipated that rich nations would go above and above by offering low- or no-cost money to assist the poor world in making the transition. Unfortunately, however, they have let everyone down. The minister said, "I don't see the developed nations having the means or will to satisfy the $100 billion climate finance pledge.

The minister exuded confidence in CBAM's ability to boost Indian exports. "The end of European manufacturing will come with CBAM. From what I can see, the European car industry will be the first victim of CBAM. India will gain a competitive advantage over the rest of the globe in every product that costs more in Europe following CBAM, he said. "Those companies will come and start manufacturing in India."

He remarked, "They may soon understand that and drop CBAM as this is incorrect and does not address the entire issue effectively and fairly," claiming that the Europeans had "shot themselves in the foot" with CBAM.

"The least they must do is give various standards to less developed and more advanced countries and make a level playing opportunity in smarter ways than attempting to harm India or its exports," said the minister.