India would bring up the carbon tax issue "very" aggressively with the European Union (EU) and handle it with the 27-nation bloc, according to Commerce and Industry Minister Piyush Goyal's statement on Friday.
Additionally, he stated that India will fortify itself and be ready to turn the problem into an opportunity at the same time. India is concerned about unilateral policies like carbon taxes and non-tariff trade obstacles, but it will respond to them in a free and equitable way while abiding by international trade laws.
Goyal stated at the Raisina Dialogue 2024 that "where we have to take legal action, we will take legal action; where we have to have conversations, discussions, and solve problems bilaterally, we will discuss and solve them." Where retaliation is required, we will take legal action.
He gave an example when he noted that several industries have expressed worry about the Carbon Border Adjustment Mechanism, or CBAM. "CBAM is something we will take up very strongly within the rules of the WTO (World Trade Organisation), we will be addressing that issue bilaterally also with the EU," Goyal stated.
As a kind of import tariff, the CBAM, or carbon tax, will take effect on January 1, 2026. This tax may have an effect on businesses in seven carbon-intensive industries, such as steel, cement, fertilizer, aluminum, and hydrocarbon products.
A research published on January 1, 2026, by the think tank Global Trade Research Initiative (GTRI) states that CBAM will result in a 20–35 percent tax on some imports entering the EU. India exports iron, steel, aluminum, and pelletized iron ore to the EU at a rate of 26.6%. The CBAM would target these items. In 2023, India sent the EU these items valued at USD 7.4 billion.
India will turn this to "our advantage," he continued. We have plans, which I am not allowed to reveal, but I can guarantee that the prime minister and his staff will make sure that Indian industry is not negatively impacted and that we are keeping a careful eye on matters like these."
