Today is Tuesday, February 27 2024.
According to an official press release from the Governement of India from last February 23 on purpose of interactions during the Raisina Dialogue 2024, the Minister of Commerce & Industry, Shri Piyush Goyal, refering to the Carbon Border Adjustment Mechanism (CBAM), said "that India is concerned by the tax imposition of the European Union (EU)". And added that the issue will be taken up "within the rules of World Trade Organisation (WTO) and will also look to address the issue bilaterally with the EU ... turning this challenge into an opportunity".
Last November, the Minister had already "emphasized the importance of fair treatment for Indian producers and exporters and reaffirmed India’s commitment to opposing unfair taxes or levies that may harm the steel industry".
According to a 2023 report of the think tank Global Trade Research Initiative, "The CBAM tax is estimated to be 20-35% tariff equivalent. This is far higher than the EU’s average import tariff of 2.2% for manufactured products".
Recall here the default values of embedded emissions for over 260 product published by the European Commission at the end of 2023. Default values are given in tonnes of CO2e emissions per tonne of goods, according to European CN Combined nomenclature codes for customs / tariff and related to the industries of iron and steel, cement, fertilizers, aluminium and hydrogen.
India is not the only country concerned with CBAM, like we already reported.
European Union is also not the only one introducing a carbon tax on imported goods. United States and United Kingdom are also thinking about their own CBAM-simular import taxes.
On this topic, also worth refering to our COP-28 Diary from December 5, when during the "Brazil: Press Briefing" we witness the following question and answer:
(Question, International media) Why did Brazil choose to discuss trade tax such as CBAM here, instead of at the WTO?
(Reply, Brazilian Chief Negotiator at COP28, Mr. Corrêa do Lago). First, because at ECO92 in Rio we agreed that no countries would create taxes on environmental issues. Second, because at WTO they say this topic is to be discussed at COP.
The Brazilian Chief Negotiator at COP28 was making reference to the Principle 12 of the 1992 June “Report of the United Nations Conference on environment and Development. Rio Declaration”:
“Principle 12. States should cooperate to promote a supportive and open international economic system that would lead to economic growth and sustainable development in all countries, to better address the problems of environmental degradation. Trade policy measures for environmental purposes should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade. Unilateral actions to deal with environmental challenges outside the jurisdiction of the importing country should be avoided. Environmental measures addressing transboundary or global environmental problems should, as far as possible, be based on an international consensus.”
It is therefore expected that EU's CBAM carbon tax issue will be strongly taken up at the WTO's Ministerial Conference (MC13) that is happening in Abu Dhabi this week, from Feb. 26 to 29.
About the Raisina Dialogue, its is India’s premier conference on geopolitics and geoeconomics committed to addressing the most challenging issues facing the global community. The conference is hosted by the Observer Research Foundation in partnership with the Ministry of External Affairs, Government of India. This effort is supported by a number of institutions, organisations and individuals, who are committed to the mission of the conference.
Click at the image below if you are interested in more about the 1992 June Rio Declaration.
