India Will Retaliate If Exports Hurt, Says Commerce Minister Goyal on Concerns Around UK’s Carbon Tax

If anybody hurts India's export interests, then it will react and retaliate in the same manner to rebalance, said Commerce and Industry Minister Piyush Goyal today while addressing concerns around Carbon Border Adjustment Mechanism (CBAM). India on Thursday inked its long-negotiated Comprehensive Economic and Trade Agreement (CETA) with the United Kingdom, which did not mention anything related to CBAM.

"As of now, there is no CBAM. Even if it arises in some hypothetical future, it cannot be addressed through agreements being implemented today," Goyal said.

"We are a sovereign and very powerful nation now. If anybody hurts our export interests, we will react, hurt and retaliate or rebalance to make sure that our interest is not hurt," he emphasised.

The minister further pointed out that there is a lot of opposition to CBAM within Europe itself. “It will increase the cost of infrastructure, housing, and manufacturing across the EU. The real sufferers from CBAM won’t be Indians, but European industries and businesses,” he underlined.

The UK's CBAM is set to come into effect from January 1, 2027. It will place a carbon price (tax) on some of the most emissions-intensive industrial goods imported by the UK.

Goyal also reiterated that a free trade agreement must be a win-win for both sides and CETA was signed, protecting every sensitive sector of India vis-à-vis the UK in mind. He also stated that the pact with the UK opens greater access for India to the developed world, in contrast to the trade agreement with the Association of Southeast Asian Nations (ASEAN), which, he argued, yielded little for India.

“They did not open their markets to us the way India did for their goods,” Goyal said. “The Modi government is now pursuing trade deals only with developed countries that view India not as a competitor but as a complementary partner,” he added.

Touching on other ongoing trade negotiations, the minister informed that discussions with Oman are almost finalised. On the other hand, trade talks with the EU and the United States are also making fast progress.