EU Considers Expanding Carbon Tax Scope, Raising Costs for Indian Exports
The European Union is considering expanding its Carbon Border Adjustment Mechanism (CBAM) to include a wider range of carbon-intensive goods, which could make several Indian exports more expensive in the European market. A draft proposal suggests bringing around 180 additional steel- and aluminium-based manufactured products under the tax from 2028.
The proposed changes also aim to tighten rules on carbon accounting and restrict the use of international carbon credits, alongside stricter compliance and reporting norms. Experts warn this could transform CBAM into a broader tax covering many industrial goods, potentially offsetting benefits expected from the India-EU free trade agreement and increasing pressure on Indian exporters.