Divided EU allows India to pitch for carbon tax relief

Differences within the European Union (EU) over a looming carbon border tax have given India an opportunity to pitch for some relief from its onerous requirements that are expected to hurt exports to one of the country's largest trading partners.

- Dhirendra Kumar

As the EU prepares to implement the Carbon Border Adjustment Mechanism (CBAM) in 2026, internal disagreements from Poland, Germany and France, besides other Eastern European countries, have surfaced.

India plans to capitalize on these divisions to demand tweaks in the norms while raising the issue at the World Trade Organization's 14th Ministerial Conference in March, two people aware of the matter said on condition of anonymity.

"There has been a growing demand for tweaking the norms from some member states," the first of the two people said. "Though we have been raising concerns about this right from the inception stage, we will push our demand at the WTO and other platforms. The norms are very anti-competitive."

Besides, in the upcoming free-trade agreement (FTA) talks with the bloc, India will seek easier norms to protect the economic interests of local businesses, the two people said.

The key demands include protecting the commercial confidentiality of exporters' data, especially for small businesses-or the micro, small and medium enterprises (MSMEs)-and easing CBAM's complex compliance requirements.

Queries emailed to the commerce ministry remained unanswered till press time.