India to exclude non-trade issues at WTO talks, to engage with EU on CBAM

New Delhi: In a move that underscores its strategic priorities, India will steer clear of initiating discussions on non-trade issues such as labour and climate at the 13th Ministerial Conference of the World Trade Organization (WTO), set to commence on 26 February in Abu Dhabi, a top-level official said on Wednesday. 

This stance signals India's firm commitment to focusing on trade-centric discussions, despite the growing global discourse on integrating sustainable development with trade policies.

“Trade barriers should not be erected under the guise of sustainable development and there are different multilateral forums like in the United Nations where these issues can be discussed,” the official said on the condition of anonymity.

The move is significant as it comes at a time when the trade ministers of 164 countries are gearing up to converge in Abu Dhabi to tackle a broad spectrum of topics, including agriculture, fisheries, and the nexus between trade and sustainable development. 

With developed countries advocating for the inclusion of formal discussions on non-trade issues, India's resolve to keep such debates off the WTO agenda reflects a deliberate effort to safeguard its trade interests. 

The official emphasized that while issues like the environment and labour are crucial, they are deemed non-negotiable at the WTO level, advocating instead for their discussion within specialized multilateral forums, such as those under the United Nations.

India will, however, actively engage with the European Union (EU) to navigate the challenges and opportunities presented by the bloc's proposed Carbon Border Adjustment Mechanism (CBAM). 

"We are engaging with the EU to find out how we can comply with that and how our industry and trade do not suffer from this tax," the official added.

CBAM proposes to tax ‘embedded carbon’ in imports of goods from emission-intensive sectors of steel, aluminium, cement, hydrogen, electricity and fertilizers. While the actual levy comes from January 2026, exporting countries were required to share emission data starting 1 October 2023. 

Indian industry is quite concerned, and has also flagged concerns around the complexity of the process. And CBAM has norms to fine non-submission or incorrect or incomplete submission of data.

"Measures taken to combat climate change, including unilateral ones should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade," the official said.

The ministerial conference is the highest decision-making body of the Geneva-based multilateral trade body. WTO’s topmost decision-making body typically meets every two years.

India had also presented a paper to the WTO in May last year, arguing against the use of environmental policies as disguised protectionist measures. The paper highlighted the growing trend of unilateral actions, exemplified by the EU's carbon tax and deforestation laws, and their detrimental effects on international trade dynamics.

"Such measures may not only violate the rules of the WTO but also have systemic implications for international law as a whole, since unilateral action undermines multilaterally negotiated rights and obligations of countries," the official said.

Furthermore, as developed nations advocate for inclusion of topics like women's economic empowerment in WTO discussions, India maintains that these issues fall within the realm of social and domestic concerns better suited for debate within UN-specific conventions.

"So we will not agree to any work programme. We will agree to discussions to promote sustainable development but our rights and obligations should not be impacted," the official added.