Finance Minister Nirmala Sitharaman said on Thursday that any initiative by wealthy countries to impose a cross-border adjustment tax to satisfy their green goals is morally wrong and goes against the interests of poor countries in the "Global South."
"The single unilateral decision to levy a border adjustment tax...the logic simply contradicts the concerns of the Global South. But cross-border imposition (of tax) and that money going towards somebody else's green agenda, if anything, is not moral at all," Sitharaman said at the CII Global Economic Policy Forum.
According to the minister, every country will need to develop resources in order to achieve global green commitments.
Her remarks come in the wake of the European Union's announcement that it will levy a carbon tax on select imports.
The CBAM (Carbon Border Adjustment Mechanism) or carbon tax (a type of import duty) will go into effect on January 1, 2026, but domestic companies in seven carbon-intensive sectors, including steel, cement, fertilizer, aluminum, and hydrocarbon products, will have to share data on carbon emissions with the EU as of October 1 this year.
In her speech, Sitharaman stated that while renewable energy cannot provide a country's basic energy needs, it is possible to think about distributing renewable energy in such a way that individual involvement is secured.
India is fast progressing in the renewable energy field, particularly in solar, and is in discussions with numerous countries for global grid connectivity via ISA members.
