India seeks Taiwan, S. Africa backing on carbon border tax

In 2021, steel exports at $4.1 billion and aluminium at $2.7 billion were India’s 5th and 7th largest exports to the EU.

- Ravi Dutta Mishra

India is in talks with South Africa, Taiwan, and several developing nations to contest the Carbon Border Adjustment Mechanism (CBAM) at the World Trade Organization (WTO), a government official said. The European Union’s (EU’s) carbon tax is estimated to impact Indian exports valued at over $8 billion annually starting in 2026.

The official said India and other developing countries will seek a postponement of CBAM until there is clarity on its compliance with the WTO rules. This comes as CBAM regulation officially took effect on 16 May. According to the regulation, exporters worldwide must give details of carbon emissions from 1 October.

Explaining the counts on which CBAM will be disputed, the official said: “We have accepted in the WTO that different geographies are at different levels of development. Especially in the context of the environment, there is an understanding that there has to be ‘common and differential treatment’. So, the basic principle of common but differentiated responsibilities (CBDR) is being compromised here," the official said.