The Crossbill News Desk
With the European Union’s new carbon tax on imports coming into force, the Congress has flagged what it sees as a growing burden on Indian exporters and warned that the forthcoming India-EU trade pact must address these additional costs.
On Thursday (January 1), the party said the carbon levy would significantly raise the cost of exporting steel and aluminium to Europe and should not be ignored in the negotiations for the long-awaited free trade agreement.
Congress general secretary Jairam Ramesh said the India-EU Free Trade Agreement is expected to be finalised later this month, even as Indian exporters begin to feel the impact of the European Union’s Carbon Border Adjustment Mechanism (CBAM).
Writing on X, Ramesh said that from Thursday onwards, Indian steel and aluminium shipments to the 27-nation EU would be subject to the carbon tax.
“In FY 2024-25, our exports of steel and aluminium to the EU averaged USD 5.8 billion — having already fallen from USD 7 billion in the previous year as EU importers began preparing for the introduction of the CBAM,” he said.
Citing estimates by the Global Trade Research Initiative (GTRI), Ramesh said many Indian exporters may have to slash prices by 15 to 22 per cent so that European importers can use that margin to pay the carbon levy.
He added that the compliance burden was also increasing because of stringent reporting requirements on carbon emissions.
“In addition, the documentation requirements call for meticulous accounting for and reporting of carbon emissions that are adding further costs to Indian exporters.
Any India-EU FTA that does get finally signed must account for this unacceptable non-tariff barrier,” Ramesh said.
On Thursday (January 1), the party said the carbon levy would significantly raise the cost of exporting steel and aluminium to Europe and should not be ignored in the negotiations for the long-awaited free trade agreement.
Congress general secretary Jairam Ramesh said the India-EU Free Trade Agreement is expected to be finalised later this month, even as Indian exporters begin to feel the impact of the European Union’s Carbon Border Adjustment Mechanism (CBAM).
Writing on X, Ramesh said that from Thursday onwards, Indian steel and aluminium shipments to the 27-nation EU would be subject to the carbon tax.
“In FY 2024-25, our exports of steel and aluminium to the EU averaged USD 5.8 billion — having already fallen from USD 7 billion in the previous year as EU importers began preparing for the introduction of the CBAM,” he said.
Citing estimates by the Global Trade Research Initiative (GTRI), Ramesh said many Indian exporters may have to slash prices by 15 to 22 per cent so that European importers can use that margin to pay the carbon levy.
He added that the compliance burden was also increasing because of stringent reporting requirements on carbon emissions.
The much-awaited India-EU Free Trade Agreement will reportedly be finalised later this month. Meanwhile, beginning today Jan 1, 2026 itself, Indian steel and aluminum exporters to the 27-nation European Union will have to pay a carbon tax under the EU’s Carbon Border Adjustment…
— Jairam Ramesh (@Jairam_Ramesh) January 1, 2026
“In addition, the documentation requirements call for meticulous accounting for and reporting of carbon emissions that are adding further costs to Indian exporters.
Any India-EU FTA that does get finally signed must account for this unacceptable non-tariff barrier,” Ramesh said.
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