UK trade deal talks hit carbon tax roadblock

London unwilling to grant concessions on carbon-heavy imports

- RAVI DUTTA MISHRA

WESTERN LABOUR AND environmental standards continue to pose challenges for Indian trade negotiators, with the UK's carbon tax — it is expected to disrupt India's exports of iron, steel, aluminium, ceramics and cement — emerging as a key sticking point in talks aimed to finalise a trade deal during the latest round of negotiations in London, it has been learnt.

As the UK remains unwilling to grant any concession under its Carbon Border Adjustment Mechanism (CBAM), which seeks to impose duties on carbon-intensive imports, India has proposed a "rebalancing mechanism" which would require the UK to compensate Indian industry for losses incurred due to the regulation. "The 'rebalancing mechanism' article has been inserted into the 'general exceptions' chapter of the negotiating text between the two countries. This would enable India to claim compensation for its losses and ensure the UK does not raise a dispute against India at the World Trade Organisation (WTO)," a government official, speaking on the condition of anonymity, said.