India plans to protest the European Union's proposed carbon tax on imports of steel, iron ore and cement at the next meeting of World Trade Organization (WTO) later this month, saying it would emerge as a new trade barrier, two Government sources said.
India, along with South Africa and other like-minded countries, is planning to push its demand to rein in the European Union's unilateral measure at the WTO's Ministerial Conference (MC13), to be held in Abu Dhabi from Feb. 26 to 29, senior officials said.
"Any unilateral measures taken to combat climate change should not constitute a means of arbitrary or unjustifiable discrimination or disguised restriction on global trade," one of the officials, with direct knowledge of WTO discussions, told reporters on February 7.
India had earlier decided to file a complaint in the WTO over the EU's proposal to impose 20-35% tariffs on imports of high-carbon goods like steel, iron ore and cement, while raising the issue with EU officials in bilateral meetings.
EU's carbon tax
The EU has said it designed the Carbon Border Adjustment Mechanism (CBAM) carefully so that it was compatible with WTO rules, applying the same carbon price on imported goods as on domestic EU producers.
India and China are among several countries that have aired concerns within the WTO over the EU’s carbon tax designated to prevent European industry being undercut by cheaper goods from countries with weaker environment rules.
“Climate change is a real issue, and knows no territorial borders,” said the second official. The officials declined to be identified according to government policy on discussions at international forums.
The Commerce Ministry, which is leading India's negotiations at the WTO, declined to comment. The official said developed countries had missed an agreed annual target of mobilising $100 billion by 2020 for climate action in developing countries.
New Delhi has also opposed EU regulations banning the import of products based on deforestation in the country of origin, likely to hit billions of dollars worth of exports from India.
