According to the report, India’s finance ministry said that it sees the exports to European Union will be affected by 20 to 35% tariffs on high-carbon goods, including steel, iron ore, and cement.
EU has announced its first plan to impose taxes on high carbon goods imports from 2026, targeting a net zero emitter of greenhouse gases by 2050. That is the plan which is earlier than India’s target by 20 years.
EU will request the reports of carbon steel content from imports starting October 1st, 2023. The main goods will be steel, cement, aluminum, fertilizers, electricity, and hydrogen. It will be an upcoming risk to India’s exports, including the European Union’s introduction of the Carbon Border Adjustment Mechanism.
However, the report also mentioned that energy prices were expected to be at a lower level for the rest of the years, offsetting some trade deficits.