European Union carbon tax unacceptable, hurting exporting costs: Jairam Ramesh

The Congress on Thursday (January 1, 2026) raised concerns over the rising costs of exports owing to the European Union’s (EU) carbon tax and said the India-EU FTA to be signed later this month must account for the “unacceptable” non-tariff barrier.

Congress general secretary Jairam Ramesh said the much-awaited India-EU Free Trade Agreement will reportedly be finalised later this month.

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“Beginning from Thursday (January 1, 2026), Indian steel and aluminium exporters to the 27-nation European Union will have to pay a carbon tax under the EU’s Carbon Border Adjustment Mechanism (CBAM),” he said in a post on X.

“In FY 2024-25, our exports of steel and aluminium to the EU averaged $5.8 billion — having already fallen from $7 billion in the previous year as EU importers began preparing for the introduction of the CBAM,” he said.

Mr. Ramesh cited the think-tank GTRI’s estimate, according to which many Indian exporters may have to cut prices by 15-22% so that their EU importers can use that margin to pay the carbon tax.

“In addition, the documentation requirements call for meticulous accounting for and reporting of carbon emissions that are adding further costs to Indian exporters. “Any India-EU FTA that does get finally signed must account for this unacceptable non-tariff barrier,” Mr. Ramesh said.