Indian plans to file a complaint to the World Trade Organisation over the European Union’s proposal to impose 20% to 35% tariffs on imports of high-carbon goods like steel, iron ore and cement from India, top government and industry sources said.
This is part of New Delhi’s strategy to combat the EU’s Carbon Border Adjustment Mechanism (CBAM) designed to push local industries to invest in new technologies to bring down carbon emissions, while also raising the issue in bilateral talks.
Piyush Goyal, India’s trade minister, is on a visit to Brussels to meet EU leaders to address bilateral issues and promote trade.
“I’m sure the intention is not to create a barrier to trade,” he told a news conference after his meetings on Tuesday (16 May).
“We remain engaged, we are discussing the issue and we have a long time ahead of us in which we will be working together to find the right solutions to this.”
EU trade chief Valdis Dombrovskis said the European Commission had designed CBAM carefully so that it was compatible with WTO rules, applying the same carbon price on imported goods as on domestic EU producers.
Last month, the European Union approved the world’s first plan to impose a levy on high-carbon goods imports from 2026, targeting imports of steel, cement, aluminium, fertilisers, electricity, and hydrogen, aiming to become a net zero emitter of greenhouse gases by 2050, ahead of India’s target of 2070.
“In the name of environment protection, EU is introducing a trade barrier that would hit not only Indian exports but also of many other developing countries,” said a top government official with direct knowledge of the matter.
The government was planning to file a complaint to the WTO against the EU’s unilateral decision and would seek relief for exporters, particularly small companies, the official said without disclosing further details.
India sees the proposed levy as discriminatory and a trade barrier, and would question its legality while citing that New Delhi was already following the protocols pledged in the U.N. Paris climate agreement, said another government official involved in the team dealing with WTO matters.
Three industry sources who attended a meeting last week called by the government to discuss the issue confirmed the plans to raise the issue at the WTO.
