India to Address European Union's Carbon Tax Plans Confidently, Says Piyush Goyal
New Delhi: Day after several concerns on carbon tax flagged by finance minister Nirmala Sitharaman, commerce and industry minister Piyush Goyal on Friday said that India will address the issue of the European Union’s plan to impose a carbon tax on certain imported goods. “Bharat will address the problem of Carbon Border Adjustment Mechanism (CBAM) with confidence.
The CBAM or carbon tax (a kind of import duty) will come into effect from January 1, 2026. However, from October 1 this year, domestic companies from seven carbon-intensive sectors, including steel, cement, fertiliser, aluminium and hydrocarbon products, will have to share data with regard to carbon emissions with the EU. “We will see how we can convert CBAM to our advantage if it comes in. Of course, I will retaliate. You need not worry about it,” Goyal said here at an industry chamber event here.
According to a Global Trade Research Initiative (GTRI) report, CBAM will translate into a 20-35 per cent tax on select imports into the EU, starting January 1, 2026. India’s 26.6 per cent of exports of iron ore pellets, iron, steel, and aluminium products go to the EU. These products would be hit by CBAM. India exported these goods worth $7.4 billion in 2023 to the EU.
Goyal also said that India retaliated against the US after it imposed additional customs duties on certain steel and aluminium products. To resolve the issues, India and the US ended all the bilateral disputes that they had in the World Trade Organisation (WTO). The minister also asked the industry to help promote the electric vehicle mission of the country to promote sustainable growth.
“There is a need to quickly replace the existing public buses and trucks in the country with electric vehicles, besides two and four-wheeler vehicles in a mission mode. We have not even started the progress on replacement of old vehicles. Can we have more vehicles scrapped across the country? Can each one of you start demanding that in your company, all vehicles will be electric, all trucks coming into your companies will be electric,” he asked.
The minister said that using electric vehicles has economic value. Citing an example of Mumbai's Brihanmumbai Electric Supply and Transport (BEST), Goyal said it was a perpetually loss-making body, but they are now moving to EV buses. “Now, in a year or 1.5 years, there will be 100 per cent electric buses and (I have been informed that) as soon as all the buses go electric, they will end losses and convert it (BEST) into a profit-making body,” he added.
