Amid brewing tensions between the European Union (EU) and supplier countries at the World Trade Organization (WTO) over the Brussels’ Carbon Border Adjustment Mechanism (CBAM), Commerce Minister Piyush Goyal said Friday that India will “retaliate” against such unfair taxes.
This comes as New Delhi is working on its own carbon tax mechanism which aims to penalise imports from developed countries for the historic carbon emission that has played a much larger role in fuelling global warming.
“Bharat will address the problem of CBAM with confidence. We will find solutions. We will see how we can convert CBAM to our advantage. Of course we will retaliate. India today does not do these things easily. Even with the US, we retaliated when they had put unfair taxes on us. And see what happened. We were able to resolve all the seven WTO disputes,” Goyal said while speaking at an industry event.
Moreover, India is in talks with South Africa, Taiwan, and several developing nations to contest the Carbon Border Adjustment Mechanism at the WTO.
Goyal said the Indian economy is resilient and that the foreign exchange reserves can cover imports for the next five to six years. “While the IMF may have a formula and the RBI may report our $600 billion foreign exchange reserves as 11 months of imports…which is significantly higher than what most other countries have…my own perspective about our foreign exchange reserves is that they are now sticky,” Goyal said.
However, Indian exports are slowing while imports are on the rise. India’s trade deficit in October had surged to record levels after a sharp jump in gold imports during the festive season.
