These findings are based mostly on knowledge from the previous three years (2021-22, 2022-23 and 2023-24).
CBAM is an EU proposal to impose taxes on energy-intensive merchandise similar to iron, metal, cement, fertilizers and aluminum imported from international locations similar to India and China. The tax is predicated on the carbon emissions produced throughout the manufacturing of those items.
The EU believes that this mechanism creates a stage enjoying subject for domestically manufactured merchandise, which should adjust to stricter environmental requirements, and helps scale back imported emissions. However different international locations, particularly creating international locations, fear it should injury their economies and make commerce with the EU too expensive.
The transfer has additionally triggered debate in multilateral boards together with the United Nations local weather convention, with creating international locations arguing that below United Nations local weather change guidelines, international locations can’t resolve how different international locations ought to scale back emissions.
Avantika Goswami, head of CSE’s local weather change program, mentioned India’s exports of products lined by CBAM to the EU accounted for 9.91% of its complete items exports to the EU in 2022-23. She mentioned 26% of India’s aluminum and 28% of metal exports in 2022-23 will go to the EU. These industries dominate the basket of products lined by CBAM from India to the EU. Exports of products lined by CBAM to the EU will account for a few quarter (25.7%) of India’s complete world exports of such items in 2022-23, which is important for industries in these sectors.
At present, India doesn’t export hydrogen and electrical energy to the EU.
Of the overall merchandise exports from India to the world, exports to the EU lined by CBAM account for under about 1.64%.
