Piyush Goyal says India will retaliate if European Union imposes carbon tax

Union Commerce and Industry Minister Piyush Goyal said on Tuesday India will impose retaliatory tariffs if the European Union goes ahead with its plan to levy a carbon tax on Indian products.

He also said the talks about climate change is dwindling and termed the EU's Carbon Border Adjustment Mechanism (CBAM) as "very very irrational regulations".

"If they will put in carbon tax, and now there is a big if for obvious reasons. If they do put it in, we will retaliate. They will put it on products which really will hurt their own economy and the retaliation will further hurt their economy," Goyal said at an event in New Delhi.

"I think it will be very silly particularly to put tax on friendly countries. I am in continuous dialogue with them and I am hoping wiser sense will prevail in the EU countries," he added.

Under the CBAM, Indian exports of steel, aluminum, and cement to the EU could face tariffs of 20-35 per cent.

The developed countries should share technologies and finances to developing and least developing nations to deal with the issues related to climate change, Goyal commented.

Flagging Concerns Over Carbon Tax

During a recent visit to London, Oslo and Brussels, the commerce minister had flagged concerns over the carbon tax.

"The minister had raised concerns about CBAM and clearly stated that India will retaliate. We have conveyed this to them," an official said, according to news agency PTI report.

India-US Bilateral Trade

The talks on the proposed India-US bilateral trade agreement are going "fabulously" well and it is a great opportunity for both the countries to come closer together, said Goyal.

"...at USD 83,000 per capita income, what the US can produce can never compete with Indian goods...and there are so many technology and innovations and products which are not available in India, which I would rather buy from the US than from many other non-market economies," he said.