New Delhi: The government on Friday said that the European Union's (EU) deforestation regulation and carbon tax are unfair and would impact Indian industries as major agriculture-exporting countries, including Brazil, India, Indonesia and the US, have raised objections to the EU deforestation regulation (EUDR).
Addressing industry and representatives of EU here on the launch of Federation of European Business in India (FEBI), commerce and industry minister Piyush Goyal said that the EU's safeguard measures on some steel products are irrational too. “Indian industries are confronted with unfair rules of deforestation, rules around carbon border adjustment mechanism (CBAM) and various other measures,” he said.
The EUDR was adopted on May 16, 2023, and seeks to prevent the import of specified goods contributing to deforestation and forest degradation in the EU market. The covered products include coffee, leather, oil cake, wood furniture, paper, and paperboard, with plans to expand the product list further. However, the regulation has faced significant backlash from several major trading partners.
The global trade research initiative (GTRI) also said India's exports of products like coffee, leather hides, and paperboard worth $1.3 billion annually to the EU could be impacted due to the regulation. Similarly, India has raised strong objections against the CBAM, under which the EU has proposed to impose additional duty on the seven carbon-intensive sectors, including steel, cement, fertiliser, aluminium and hydrocarbon products.
Even Union finance minister Nirmala Sitharaman also recently said the CBAM is unilateral and arbitrary and will hurt India's exports after its implementation by the EU. Last month, India proposed the imposition of retaliatory customs duties, under WTO norms, on certain value of goods imported from the EU, as the two sides have failed to reach a consensus on the EU's safeguard measures on some steel products.
