The Congress on Thursday raised concerns over rising export costs for Indian companies due to the European Union’s carbon tax, urging that the upcoming India–EU Free Trade Agreement (FTA) address what it called an “unacceptable” non-tariff barrier.
Congress general secretary Jairam Ramesh highlighted that the long-pending FTA is reportedly set to be finalised later this month, even as Indian exporters face new levies under the EU’s Carbon Border Adjustment Mechanism (CBAM).
“Starting Thursday, Indian steel and aluminium exporters to the 27-member EU will be required to pay a carbon tax under the CBAM,” Ramesh said in a post on X. He noted that in FY 2024-25, India’s steel and aluminium exports to the EU averaged USD 5.8 billion, down from USD 7 billion in the previous year, as European importers began preparing for the CBAM.
Citing estimates from think-tank Global Trade Research Initiative (GTRI), Ramesh said several Indian exporters may be forced to cut prices by 15–22 per cent so that EU buyers can cover the carbon tax. He added that the documentation requirements, which demand meticulous accounting and reporting of carbon emissions, are further increasing costs for Indian exporters.
“Any India–EU FTA that is finally signed must take this unacceptable non-tariff barrier into account,” Ramesh stressed, underscoring the Congress party’s demand for the issue to be addressed in the trade agreement.