India will address EU's carbon tax issue; will retaliate if required: Goyal

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India will address the issue of the European Union's plan to impose a carbon tax on certain imported goods, Commerce and Industry Minister Piyush Goyal on Friday said, adding that "I will retaliate" if required.

The CBAM (Carbon Border Adjustment Mechanism) or carbon tax (a kind of import duty) will come into effect from January 1, 2026. However, from October 1 this year, domestic companies from seven carbon-intensive sectors, including steel, cement, fertiliser, aluminium and hydrocarbon products, will have to share data with regard to carbon emissions with the EU.

"Bharat will address the problem of CBAM with confidence, and we will find solutions. We will see how we can convert CBAM to our advantage if it comes in. Of course, I will retaliate. You need not worry about it," Mr. Goyal said here at an industry chamber event.

According to a Global Trade Research Initiative (GTRI) report, CBAM will translate into a 20-35% tax on select imports into the EU, starting January 1, 2026.

India's 26.6% of exports of iron ore pellets, iron, steel, and aluminium products go to the EU. These products would be hit by CBAM. India exported these goods worth $7.4 billion in 2023 to the EU.

He also said that India retaliated against the US after it imposed additional customs duties on certain steel and aluminium products.

To resolve the issues, India and the US ended all the bilateral disputes that they had in the World Trade Organization (WTO).