In Short : India can address the EU carbon tax by engaging in diplomatic dialogue, promoting technology transfer for cleaner practices, reducing domestic emissions, expanding renewable energy, participating in carbon markets, investing in carbon capture, enhancing climate diplomacy, and mobilizing green finance for sustainable development.
In Detail : India has an array of implicit taxes on coal and petro products to deal with EU’s CBAM
EU’s CBAM (Carbon Border Adjustment Mechanism) has taxes on imports based on carbon content, on top of other regular custom duties. Its transitional phase started on October 1, 2023, and the first reporting period ends on January 31, 2024, when the importers in the EU member states are required to register details of emissions embodied in all their imports and effective carbon price in the exporting country, by source and commodity classification, based on a detailed template provided.