The government is studying the possible impact of the European Union’s (EU’s) Carbon Border Adjustment Mechanism (CBAM) on India vis à vis other countries, as it gears up to tackle the bloc’s move to impose a levy on imported carbon-intensive products.
As part of a detailed assessment of the possible repercussions of the CBAM, officials believe the EU will also feel the pinch as the carbon tariff will increase inflationary pressure on the bloc. They said considering that the EU is already facing the risk of a recession, the CBAM may hurt European nations more than India.
“The EU is bringing the CBAM in a manner which will be inflationary for them. The cost of steel and aluminium in the EU will go up since (its) industry will have to match up to the standards,” a senior government official told Business Standard.
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