As per the reports, 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.
In an effort to become a net-zero emitter of greenhouse emissions by 2050, the EU has unveiled its first plan to put taxes on imports of high-carbon commodities beginning in 2026. That is the strategy, which is 20 years ahead of India’s goal.
Starting on October 1st, 2023, the EU will ask for reporting on the amount of carbon steel imported. Steel, cement, aluminium, fertilisers, power, and hydrogen will be the key commodities. The establishment of the Carbon Border Adjustment Mechanism by the European Union will pose a risk to Indian exports.
However, the research also noted that energy costs were anticipated to decline in subsequent years, helping to reduce some trade deficits.