India Ready to Retaliate if UK Imposes Carbon Tax, Warns Piyush Goyal

Commerce Minister Piyush Goyal has made it clear that India will not hesitate to respond if the United Kingdom imposes a carbon tax on Indian exports under the Carbon Border Adjustment Mechanism (CBAM).

Speaking after the Comprehensive Economic and Trade Agreement (CETA) was signed between India and the UK on July 24, Goyal highlighted that while the UK has verbally acknowledged India’s right to take countermeasures, this understanding is not part of the official agreement.

“India is not weak. Whoever puts a non-tariff barrier on our trade, India will give an appropriate response,” Goyal firmly stated.

CBAM Implementation Still Pending in UK

The UK government is expected to implement CBAM by 2027, a policy that aims to put a price on carbon emissions tied to imports. This type of policy could potentially hurt Indian industries that export goods to the UK, especially those with high carbon footprints like steel, aluminum, and cement.

Goyal pointed out that the carbon tax has been repeatedly postponed, even in the European Union, and that the UK would only implement it after further evaluation.

“Carbon tax is getting postponed repeatedly, even the EU hasn’t implemented it yet. UK will contemplate such a levy even after that,” he added.

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India’s Position: Balanced and Assertive

While the CBAM clause isn’t formally included in CETA due to the UK’s delay in implementation, both nations have an informal understanding that India can take counter-balancing steps if the carbon tax is enforced in the future.

India’s approach remains clear—open to trade, but firmly opposed to non-tariff barriers that unfairly impact its exporters.

With the growing debate around carbon border taxes and climate-linked trade policies, India is positioning itself as a strong and balanced negotiator on the global stage. As the UK mulls over its carbon tax rollout, India has made its stance known—it will act decisively to protect its trade interests.

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