Commerce and Industry Minister Piyush Goyal on Saturday said India will “react and retaliate” if the UK imposes a carbon tax in the future that harms domestic exports.
The UK government in December 2023 decided to implement its Carbon Border Adjustment Mechanism (CBAM), starting in 2027.
“As of now, no CBAM, we are a sovereign and a very powerful nation today…So, if anybody hurts our exports interest, we will react and hurt and retaliate or rebalance to make sure that our interest is not hurt,” he told reporters when asked about the UK’s proposed CBAM.
“I can assure that no unilateral measure which hurts India can go away without a proportionate response from India,” he added.
Sources have said India flagged the issue during negotiations of the trade agreement. The comprehensive economic and trade agreement (CETA) was signed on July 24, with an aim to double bilateral trade by 2030.
The issue is not in the pact, as Britain has not yet notified of the tax.
Goyal added that the EU has also planned to impose CBAM, but it is going to hurt the European Union more.