Freedom to 'rebalance': India on UK carbon border tax

India will take "appropriate measures" if Britain's proposed Carbon Border Adjustment Mechanism (CBAM) undermines the trade benefits secured in the just-signed free-trade agreement (FTA), a senior government official said on Friday.

- SHREYA NANDI

The Comprehensive Economic and Trade Agreement (Ceta) — formally inked between India and the United Kingdom — sidesteps any explicit reference to the UK's CBAM, which is expected to take effect in January 2027. While New Delhi has consistently flagged concerns over the proposed levy, seeking safeguards within the agreement, London is understood to have argued that CBAM is still in its preparatory phase and therefore could not be written into the FTA text.

However, if CBAM adversely impacts Indian exports covered by the deal, the government will act to ensure that the agreed market access terms are not diluted.