The UK is set to implement its Carbon Border Adjustment Mechanism (CBAM) in 2027, targeting carbon intensive imports like steel, aluminum, and cement. This move is creating friction in the India-UK trade relationship, as India faces potential taxes on hundreds of millions of dollars in exports. Trade negotiations are currently focused on balancing these carbon costs against other tariff concessions. The dispute highlights the growing tension between international trade agreements and the deployment of national carbon pricing tools to prevent carbon leakage.
