India's Trade Standoff: Navigating UK's New Carbon Tax Rules
The India-UK free trade agreement has no provision against Britain's proposed carbon tax. This absence could impact India's exports worth $775 million. Though the UK intends to implement this tax by 2027, India's right to retaliate is preserved in case of future impacts.
- Country:
- India
India's exporters may face new challenges after the UK announced plans to implement its Carbon Border Adjustment Mechanism by 2027. This move could affect Indian exports, including iron, steel, and aluminium, totaling approximately $775 million annually.
Officials highlighted that the current India-UK free trade agreement lacks measures against this proposed tax, potentially offsetting the benefits India gains from trade concessions.
Commerce Minister Piyush Goyal raised concerns, indicating India may pursue retaliatory measures if the UK proceeds. The tax proposal mirrors the European Union's stance, aiming to impose a tax between 14-24% on pertinent sectors.
(With inputs from agencies.)
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