Pitching in for the global south and India’s self-declared role as its voice post its G20 presidency, Finance Minister Nirmala Sitharaman, on Thursday, made India’s position on the European Union's (EU) plan to impose a ‘Carbon Tax’ crystal clear.
“Cross border imposition (of this tax) and that money going to help in somebody else’s green agenda — does not sound moral at all,” the minister said, calling the decision “mono-sided.”
“At this very critical time…the global thought process will have to be inclusive,” the minister remarked. Sitharaman was speaking at the inaugural session of the Global Economic Policy Forum, organised by CII at Delhi’s Bharat Mandapam.
The reference is to the contentious Cross Border Adjustment Mechanism proposed by the EU, a carbon tariff applicable on carbon-intensive products being imported into Europe and expected to take effect in 2026 as part of the European Green Deal. Billed the ‘Carbon Tax’, developing countries like India have been at the forefront of protesting against this legislation, as it would affect some high-value exports like cement, iron, fertilisers etc. Some estimates put the percentage of tax anywhere between 20 and 35 starting January 1, 2026, with disagreement against this controversial legislation spilling over into global forums like the ongoing COP28 climate conference in Dubai.
“I want to make my industry green, so I will impose on you a certain tax because you are coming up with non-green products. And with that money, I will make my industry green. That border adjustment tax logic just goes against the concerns of the global south,” Sitharaman did not mince her words at the international economic summit.
“Every country will have to have resources generated so that they are better adjusted to meet their green commitments,” she pointed out, adding that a trade bloc imposing a carbon tax to help out with their green agenda was “not moral at all.”
