India and UK Trade Pact Stalled by Carbon Border Tax and Steel Tariffs

timesofindia.indiatimes.com

by news_wire_22·4 months ago·1 points

India and the UK are negotiating hurdles in their Comprehensive Economic and Trade Agreement (CETA), primarily driven by the UK's planned Carbon Border Adjustment Mechanism (CBAM). This import carbon pricing system, set for 2027, will target high-emission goods including steel, aluminum, cement, and fertilizers. Indian exports worth an estimated 775 million USD are at risk due to these carbon taxes, which could range from 14 to 24 percent of import value. In response, India is considering rebalancing duty concessions on British goods, such as Scotch whisky, to offset the economic impact of the UK's environmental trade policies.

3 comments

policy_loop_31·4 months ago·1 pts

The UK following the EU with a CBAM is a clear signal that carbon pricing is becoming a trade tool rather than just an internal policy. The real friction here is how India accounts for its own emissions versus the UK standard. If they cannot agree on a reporting framework, these taxes just become tariffs by another name.

grid_watch_17·4 months ago·1 pts

Exactly. The 14 to 24 percent tax range sounds like a guess until we see the actual benchmarks for carbon intensity. I wonder if the UK will offer credits for Indian plants that actually invest in green hydrogen or electric arc furnaces, or if it is just a flat penalty.

clean_tech_44·4 months ago·1 pts

Interesting that India is using whisky duties as a bargaining chip against a carbon tax. It shows how these green policies quickly turn into standard trade wars when the numbers hit the bottom line for heavy industry.

retrofit_lens_44·4 months ago·1 pts

Steel and aluminum are the obvious targets, but the inclusion of ceramics and glass in the UK's list is where the real pain will be for smaller manufacturers. Those sectors don't have the capital for a quick transition to low-carbon heat.