India, E.U. Discuss E.U. Carbon Border Tax in Brussels

India and the E.U. are working to resolve a looming issue in their trade relationship — the E.U.’s Carbon Border Adjustment Mechanism (CBAM), with the two sides discussing it during a Minister-level meeting in Brussels

India and the E.U. are working to resolve a looming issue in their trade relationship — the E.U.’s Carbon Border Adjustment Mechanism (CBAM), with the two sides discussing it during a Minister-level meeting in Brussels on May 15 (Monday) and May 16 (Tuesday). The E.U. is India’s second-largest trading partner (after the U.S.) and India’s second-largest export market.

The E.U. describes the Carbon Border Adjustment Mechanism (CBAM) as a “landmark tool” which places a “fair price” on carbon emitted during the production of goods that are entering the E.U. and a mechanism to “encourage cleaner industrial “production outside the E.U.

The CBAM regulations came into effect on May 16 and will begin their transitional phase of implementation on October 1, 2023. The tax was discussed during a visit by Commerce Minister Piyush Goyal, External Affairs Minister S Jaishankar and Minister of State for Skill Development and Entrepreneurship to Brussels for bilateral meetings and the first edition of the E.U.-India Trade and Technology Council (TTC).

The joint statement from the TTC said the two parties would “intensify their engagement to address the issues that emerge in implementation” of the CBAM.

Following the meeting, the Ministers on May 16 evening, Mr. Goyal said the two sides “remain engaged” and are discussing the issue.

“And we have a long time ahead of us within which we’ll be working together to find the right solutions to this,” he said, during a press conference of the ministers and their E.U. counterparts — EU Competition Commissioner Margrethe Vestager and Trade Commissioner Valdis Dombrovskis.