India is exploring all possible options to deal with the European Union’s (EU’s) proposed Carbon Border Adjustment Mechanism (CBAM) and has initiated sector-wise analysis of the carbon border tax’s impact on its domestic industries, such as steel and aluminium, among others.
With countries getting more conscious towards climate change, the CBAM is a measure aimed at preventing carbon leakage. The measure is not India-specific and will be applicable to all countries.
On the one hand, India may consider any retaliatory measure at a multilateral — the World Trade Organisation — level, on the other hand, it’s initiating a sector-wise analysis