EU ambassador: India's carbon pricing may affect CBAM charges as FTA talks progress

The EU's new ambassador to India, Jean-Eric Paquet, said the bloc is negotiating an investment protection agreement alongside a free trade deal, and that carbon pricing in India could be factored into the EU's carbon border adjustment mechanism (CBAM). He noted that EU sanctions do not stop Indian purchases of Russian oil, but exports of petroleum products made with Russian oil to Europe are not possible. The ambassador also said India's ties with Moscow are a constraint on defence industrial collaboration. Paquet said a team from Brussels will visit to discuss CBAM, emphasizing that it is a climate policy measure to avoid carbon leakage by encouraging carbon pricing in partner countries. He mentioned that Japan, Indonesia, and India have carbon pricing arrangements, and that companies exporting to the EU are already investing to reduce emissions. The outcome of these talks could affect the level of CBAM charges for Indian exporters. The interview also covered the India-EU FTA, expected to be signed by year-end, and the IMEC corridor. Businesses on both sides are preparing for the 'mother of all deals'. The ambassador stressed cooperation on critical minerals, supply chain resilience, and cyber security. This signals a deepening economic relationship with climate and trade linked together.