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India reserves right to negate Britain's CBAM impact | Current Affairs | Vision IAS

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India reserves right to negate Britain's CBAM impact

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India-UK Free Trade Agreement & Carbon Border Adjustment Mechanism (CBAM)

The India-UK free trade agreement does not currently include a provision regarding the United Kingdom's proposed Carbon Border Adjustment Mechanism (CBAM).

  • The UK plans to implement CBAM by 2027.
  • CBAM is considered a trade barrier by India.

Provisions for Future Implementation

  • Although CBAM is not part of the current agreement, India has secured a contingency plan for any future implications:
  • If the UK imposes CBAM in the future and it affects India's trade benefits, India reserves the right to take counterbalancing measures.
  • This understanding is documented in a note verbale, which is a diplomatic communication between countries.
  • India can potentially withdraw concessions as part of these measures.

Ongoing Negotiations with the EU

  • India is also engaged in discussions with the European Union, which is considering implementing its own CBAM.
  • The negotiations aim to conclude a trade pact that takes into account the potential impact of CBAM.
  • Tags :
  • India-UK
  • CBAM
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