FM Sitharaman calls the EU’s carbon tax on imports unilateral and harmful to India’s exports, affecting sectors like steel and cement.
Finance Minister Nirmala Sitharaman voiced concerns over the European Union’s Carbon Border Adjustment Mechanism (CBAM), labelling it unilateral and arbitrary. Set to begin on January 1, 2026, CBAM will impose carbon taxes on seven energy-intensive sectors, including steel, cement, and fertiliser, potentially hurting India’s exports. Engineering goods are also expected to be affected.
Sitharaman, speaking at the Energy Transition Summit, warned that CBAM could act as a trade barrier, complicating exports to Europe, one of India’s top markets. India’s total trade with the EU was $137.41 billion in 2023–24.
On India’s energy transition, the Finance Minister praised Prime Minister Modi’s leadership and highlighted India’s achievements in meeting climate goals ahead of schedule. She also emphasised government initiatives like the production-linked incentive (PLI) scheme and the ‘PM Surya Ghar Muft Bijli Yojana,’ which has already received two million applications.
