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Experts: Exports from India and Least Developed Countries Will Be Affected by the EU's Carbon Tax

By Outlook Planet Desk April 06, 2023

Global Trade Research Initiative (GTRI) report claims that, as of January 1, 2026, CBAM will result in a 20–35% levy on a number of imports into the EU.

Experts: Exports from India and Least Developed Countries Will Be Affected by the EU's Carbon Tax
From October 1 of this year, the EU will implement the Carbon Border Adjustment Mechanism (CBAM. AP
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According to trade analysts, the carbon tax scheme enacted by the European Union will have an impact on exports from nations, particularly India and the least developed nations, to that region.

Beginning on October 1 of this year, the EU will implement the Carbon Border Adjustment Mechanism (CBAM).

Global Trade Research Initiative (GTRI) estimates that, as of January 1, 2026, the CBAM will result in a 20–35 per cent tax on a subset of imports into the EU.

The process, according to Jawaharlal Nehru University professor Amita Batra, includes a protectionist component.

She stated at a webinar on her book, India's Trade Policy in the 21st Century, that it will have an influence on trade with nations like India and least developed countries as it targets products exported by these countries.

She also mentioned the negligible contribution of India to EU trade.

Professor Penny Goldberg from Yale University argued during the discussion that CBAM will eliminate commerce in low-income nations like India.

The mechanism would impose "huge" taxes on goods made with polluting methods.

According to GTRI's analysis, CBAM will negatively affect India's exports of metals like iron, steel, and aluminium goods to the EU.

According to GTRI co-founder Ajay Srivastava, the EU received $27 per cent of India's $8.2 billion worth of iron, steel, and aluminium exports in 2022.

Srivastva has recommended that the government take action to address the situation.

In order to tackle the CBAM issue, he has suggested creating a task force, informing all steel and aluminium companies about the October 1 deadline, and establishing the carbon market in India.

 

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