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Informist, Wednesday, Jan. 28, 2026

 

NEW DELHI – The opposition Indian National Congress Wednesday expressed concern over the Narendra Modi government's "failure" to secure an exemption for India's aluminium and steel exporters from the European Union's Carbon Border Adjustment Mechanism in the recently concluded free trade agreement with the EU.

 

Pointing out the lacuna in the agreement, which the government has publicised as a major achievement, Congress general secretary Jairam Ramesh said implementation of the carbon tax from Jan. 1 is likely to hit India's aluminium and steel exports to the EU.

 

"India's aluminium and steel exports to the EU have already fallen from $7 billion to $5 billion and are only expected to fall further beginning this year due to the enforcement of the Carbon Border Adjustment Mechanism since Jan. 1, 2026," he said in a post on the social media platform X.

 

The Congress general secretary said that over time, the carbon tax will also expand to other categories of India's industrial exports and could "effectively nullify any gains" India secures from the FTA.

 

India and the EU Tuesday jointly announced the signing of the FTA in New Delhi, with Prime Minister Modi hailing it as "the "biggest trade deal in India's history" and European Commission President Ursula von der Leyen calling it the "mother of all deals". The two sides had been negotiating the deal since 2022.

 

"There are also concerns about the EU's strict health and product safety rules, which will continue to be in force over Indian exports even after the FTA," Jairam said, adding that this can easily become a non-tariff trade barrier. The EU has been "accused of the same" by other trade partners, he pointed out.

 

The inclusion of automobiles in the FTA is also a matter of concern as it "only opens up further risk" for domestic automobile manufacturers, he said, adding, "Great care will have to be taken to ensure that India's EV (electric vehicle) industry is not vanquished."  End

 

Reported by Asim Khan

Edited by Rajeev Pai

 

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