Wed May 07 07:48:18 UTC 2025: ## India Retains Right to Retaliate Against UK’s Proposed Carbon Tax
**New Delhi, May 7, 2025** – India has secured the right to retaliate against the UK’s planned carbon border adjustment mechanism (CBAM), despite the recently signed India-UK free trade agreement lacking explicit countermeasures. While the FTA doesn’t directly address the UK’s proposed carbon tax, slated to begin in 2027, an Indian official confirmed that India maintains the option to rebalance concessions or take retaliatory action should the tax negatively impact Indian exports.
The UK’s CBAM, initially targeting sectors like iron, steel, aluminum, fertilizer, and cement, could impose a 14-24% tax on imports, potentially affecting Indian exports valued at USD 775 million, according to the GTRI think tank. Commerce and Industry Minister Piyush Goyal recently raised concerns during a visit to London, warning of potential retaliatory measures if the UK proceeds with the plan. The UK’s move follows the EU’s implementation of a similar mechanism, making it the second major economy to adopt such a policy. The lack of current UK legislation surrounding the CBAM, however, allows India to maintain its options for future responses.
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