Informist, Tuesday, Sep 17, 2024

--Govt: To discuss Carbon Border Adjustment Mechanism with EU next wk
--Govt: Ninth round of India-EU trade pact talks Sep 23-27
--Govt: To hold next round of talks on India-EU trade pact from Mon
--Trade secy: Hope to resume India-UK trade pact talks in Oct

--Trade secy:Aim to close Australia trade pact before their elections

NEW DELHI – India will hold the ninth round of negotiations with the European Union on a free trade agreement next week, the commerce ministry said in a presentation today. In the talks, to be held in Delhi from Monday to Friday, the two sides will discuss the much talked about Carbon Border Adjustment Mechanism, or CBAM.

In order to mitigate the risks of climate change, the EU announced the phased implementation of the Carbon Border Adjustment Mechanism in October last year. Under this, those importing goods into the EU have to report the carbon content of the commodity, based on which, they would be taxed. The carbon tax collection is expected to begin from 2026.

The decision by the EU may affect the profitability of Indian exporters as Europe is among the top export destinations for the country. India's total trade with the EU was $137.41 bln in 2023-24 (Apr-Mar), with imports worth $61.48 bln and exports of $75.93 bln.

The Indian government has been making a case for exemption from this mechanism, which it considers "protectionist". The European Union's decision to impose a border adjustment tax goes against the interests of the global south and "is not moral at all", Finance Minister Nirmala Sitharaman had said earlier.

Commerce Minister Piyush Goyal recently assured stakeholders, especially the steel industry, that the government is fully committed to safeguarding the interests of the industry. "The government is invested in infrastructure and the industry has to find newer ways of lowering carbon emission and promoting high quality and productivity in India," Goyal said earlier this month.

Besides trade pact negotiations with the European Union, Commerce Secretary Sunil Barthwal said that the government also hopes to resume trade pact talks with the UK in October.

India and the UK initiated negotiations for a free trade agreement in January 2022 when Boris Johnson was the prime minister of the UK. Though the two sides set a deadline of October 2022 to conclude the negotiations, political events in the UK over the last two years delayed the pact. Keir Starmer took over as prime minister in July after the Labour Party returned to power in the UK after 14 years. Barthwal earlier said that the new UK government has shown eagerness to conclude the trade deal.

The Indian industry hopes to get market access for several goods at nil customs duty in the UK under the trade agreement. It is also seeking better access to the UK for Indian professionals from the healthcare and information technology sectors. The UK has demanded a cut in import duties on scotch whisky, electric vehicles, chocolates, and lamb meat. India had total trade of $21.34 bln with the UK in 2023-24, comprising exports of $12.92 bln and imports of $8.42 bln.

Barthwal also said India hopes to close the proposed Comprehensive Economic Cooperation Agreement with Australia before the country goes for elections. The Comprehensive Economic Cooperation Agreement is an extension of the Economic Cooperation Trade Agreement that India and Australia signed in 2022. The two sides aim to explore 14 new areas under the new agreement.

The commerce ministry started negotiations for the Comprehensive Economic Cooperation Agreement with Australia in January. Australia is among the top 15 trading partners of India, with total trade of $24.10 bln in 2023-24 (Apr-Mar). End

US$1 = 83.75 rupees

Reported by Priyasmita Dutta and Krity Ambey

Edited by Saji George Titus

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