Navigating the carbon-tax era in trade

The EU's carbon tax is set to shake up world trade, but through careful preparation, India can turn this to its advantage

The process for the EU’s Border Carbon Adjustment Tax (Border-CAT) is set to start in October this year when firms exporting to the EU will start sharing emission data with their eurozone counterparts. The carbon tax will kick in from January 2026 and initially cover steel, aluminium, cement, fertilisers, hydrogen, and electricity. The list of products will expand rapidly to cover all products by 2034. 

The idea of a carbon tax has found acceptance in the developed world. The UK will soon introduce it and countries like Canada, Japan, and the US are talking along similar lines. 

Developed countries, which currently account