India has voiced strong criticism of the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM), asserting that this unilateral trade measure is not conducive to India’s progress towards a greener future. Finance Minister Nirmala Sitharaman, during an energy transition summit in New Delhi, emphasized that CBAM, which came into effect in October 2023, acts as a trade barrier that unfairly targets developing countries like India. She pointed out that India’s per capita emissions are only a third of the global average, highlighting the disparity in the burden imposed by CBAM.
The CBAM levies taxes on imports from six sectors – iron and steel, aluminum, cement, fertilizers, electricity, and hydrogen – if their emissions exceed the baselines set by European companies. This, according to Sitharaman, could significantly impact India’s industries and hinder its efforts to achieve its ambitious climate goals.
Sitharaman asserted that while India is adequately funded for its green transition and committed to achieving net-zero emissions by 2070, it cannot be prepared for such arbitrary and unilateral policies like CBAM. She underscored that India has been actively investing in renewable energy sources, promoting rooftop solar installations through its PM Surya Ghar Yojana, and providing incentives for electric vehicle manufacturing under its production-linked incentive (PLI) schemes.
India is also investing heavily in nuclear technology and leveraging its abundant hydropower resources to further accelerate its green energy transition. The Finance Minister also highlighted India’s efforts in research and development to achieve breakthroughs in nuclear technology, emphasizing the country’s commitment to exploring diverse clean energy options.
Sitharaman further emphasized that India is committed to collaborating with private investors to bridge the funding gap for climate change initiatives and accelerate its energy transition. She stressed the need for international cooperation and fair trade practices, urging the EU to reconsider the CBAM’s potential impact on developing nations like India, which are striving to balance economic growth with environmental sustainability.
