According to a report, the European Union (EU) has made it clear that India is unlikely to receive any leniencies regarding the union’s deforestation and carbon-border levy regulations. This subject is also likely to be discussed when Prime Minister Narendra Modi meets with European Commission President Ursula von der Leyen (the EU’s executive branch).
On the first of these visits to India, she will be in New Delhi from February 27 to 28 with the commissioners of 21 nations. An unidentified senior trade bloc official was cited in the newspaper as stating that although India’s reservations regarding the Carbon-Border Adjustment Mechanism (CBAM) are “illegitimate,” the bloc is prepared to address them.
In order to promote cleaner industrial production methods, the EU will impose a carbon tax on imported goods starting January 1, 2026, known as the Carbon-Border Adjustment Mechanism (CBAM). In the meantime, a new rule known as the Deforestation Regulation stipulates that goods entering the union cannot originate from deforested territory after December 31, 2020. For major businesses, it will take effect on December 30 of this year; for small businesses, it will take effect on June 30, 2026.
Nonetheless, a number of nations, such as China and India, have criticized these regulations, claiming that they are trade restrictions masquerading as carbon emission reductions. Ajay Srivastava, a former member of the Indian Trade Service and the founder of the Global Trade Research Initiative, was quoted in the report as saying that while Indian steel and aluminum may be subject to high carbon charges in India, goods from the EU would enter duty-free once the CBAM and the Free-Trade Agreement (FTA) take effect. He went on to say that this was against a World Trade Organization (WTO) regulation, despite the EU’s claim that the regulations are in fact in line with WTO standards, as per the report. Therefore, India has emphasized the necessity of a lengthier transition period prior to the implementation of these policies.
