India weighs local tax options to avoid EU carbon levy – minister

NEW DELHI (Reuters) – India is looking at potentially taxing high-carbon goods locally, and then using the proceeds to support its green energy transition, to avoid the European Union’s carbon tax on imports, the country’s trade minister said on Thursday.

The EU’s plan to impose a carbon levy from 2026 on high-carbon goods such as steel and iron ore, approved in April, has drawn concerns from India and the two sides are holding talks to discuss the issue.

Trade Minister Piyush Goyal said there would be no additional levy if the exporting nation taxes carbon locally.

“We will find a solution around a domestic tax to take care of equating with European taxes on carbon emissions,” he said at an industry event.

“So if we collect the tax in India itself and use it for our green energy transition, which will indirectly help the same companies that are exporters as they transition to cleaner energy and bring down their cost, there will be no additional CBAM (Carbon Border Adjustment Mechanism) tax.”

(Reporting by Shivangi Acharya Writing by Shivam Patel; Editing by Mark Potter)