File photo: Congress MP Jairam Ramesh (IANS)
New Delhi: The Congress on Thursday raised concerns over rising export costs due to the European Union’s carbon tax and said the India-EU FTA to be signed later this month must take into account the “unacceptable” non-tariff barrier. Congress general secretary Jairam Ramesh said the much-awaited free trade agreement between India and the EU would be finalized later this month.
From Thursday, Indian exporters of steel and aluminum to the 27-nation European Union will have to pay a carbon tax under the EU’s Carbon Border Adjustment Mechanism (CBAM), he said in an article on X.
The much-anticipated free trade agreement between India and the EU is expected to be finalized later this month. Meanwhile, starting today, January 1, 2026, Indian exporters of steel and aluminum to the 27-nation European Union will have to pay a carbon tax as part of the EU Border Carbon Adjustment…
-Jairam Ramesh (@Jairam_Ramesh) January 1, 2026
“In the 2024-25 financial year, our steel and aluminum exports to the EU averaged $5.8 billion – having already declined from $7 billion the previous year as EU importers began to prepare for the introduction of CBAM,” he said.
Ramesh cited think tank GTRI’s estimate that many Indian exporters may have to cut prices by 15 to 22 percent so that their European importers can use that margin to pay the carbon tax.
“Furthermore, documentation requirements require meticulous accounting and reporting of carbon emissions, which adds additional costs to Indian exporters. “Any India-EU FTA that is ultimately signed must take into account this unacceptable non-tariff barrier,” Ramesh said.
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