Latest news with #CBAM
Fibre2Fashion
2 days ago
- Business
- Fibre2Fashion
EU Council, Parliament strike deal on simplification of CBAM
The European Council presidency and European Parliament's negotiators reached a provisional agreement yesterday on one of the proposals of the so-called 'Omnibus I' legislative package: a regulation that simplifies and strengthens the European Union's (EU) carbon border adjustment mechanism (CBAM). The CBAM is the EU's tool to equalise the price of carbon paid for EU products operating under the EU emissions trading system (ETS) with that of imported goods, and to encourage greater climate ambition in non-EU countries. The European Council and Parliament have reached a provisional pact on an 'Omnibus I' legislative package proposal: a regulation that simplifies and strengthens the EU carbon border adjustment mechanism (CBAM). New de minimis mass threshold of 50 tonnes will exempt 90 per cent of importers from CBAM rules. CBAM's climate goals have not been compromised. Import procedures will also be simplified. The proposal seeks to provide simplification and cost-efficient compliance improvements to the CBAM regulation, without compromising its climate goals, as about 99 per cent of embedded emissions in the imported CBAM goods would remain covered. The overall aim is to reduce the regulatory and administrative burden, as well as compliance costs for EU companies, especially small and medium enterprises (SMEs), according to a release from the Council. Co-legislators supported a new de minimis mass threshold, whereby imports up to 50 tonnes per importer per year will not be subject to CBAM rules. It replaces the current threshold exempting goods of negligible value. The new threshold exempts the vast majority (90 per cent) of importers—mainly SMEs and individuals—who import only small quantities of CBAM goods. Co-legislators also agreed on changes to simplify imports covered by the CBAM such as the authorisation process, the calculation of emissions and verification rules as well as the financial liability of authorised CBAM declarants, while strengthening anti-abuse provisions. The deal has still to be endorsed by both the European Parliament and Council. It will enter into force three days after publication in the EU Official Journal. In early 2026, the Commission will assess whether to extend the scope of the CBAM to other ETS sectors and how to help exporters of CBAM products at risk of carbon leakage. Fibre2Fashion News Desk (DS)
Mint
5 days ago
- Business
- Mint
India should hold its ground in trade negotiations with the EU
Next Story R.V. Anuradha , Prachi Priya Talks on a free trade agreement (FTA) with the EU are underway and Indian industry has much at stake. To make export headway, India Inc needs a wide range of European barriers lowered. The EU's CBAM is just one of them. Key concerns must be addressed before finalizing the India-EU FTA. Gift this article The World Trade Organization (WTO) has been of scant effectiveness against US President Donald Trump's sweeping unilateral tariffs. Wielding the shield of 'national security,' the first Trump presidency levied 25% tariffs on imports of steel and 10% on aluminium. The World Trade Organization (WTO) has been of scant effectiveness against US President Donald Trump's sweeping unilateral tariffs. Wielding the shield of 'national security,' the first Trump presidency levied 25% tariffs on imports of steel and 10% on aluminium. India challenged these and later withdrew its case at the WTO on account of a 'mutual settlement,' though the US never withdrew those additional tariffs. WTO panels initiated by other members, including Norway, Switzerland and China, ruled in 2023 that the tariffs did not pass the 'national security' test. Also Read: The EU's CBAM has lent urgency to fair carbon prices The US, however, ignored these rulings. Trump's second presidency has seen the national security shield cast wider, first for sweeping Liberation Day tariffs against over 90 countries, and more recently, for a 50% tariff against steel and aluminium imports. A group of businesses in the US successfully challenged the Liberation Day tariffs, but the administration has appealed the decision. India has so far not retaliated. The UK may reportedly get a conditional exemption from the 50% tariff on steel under a US-UK free trade agreement (FTA), although Tata Steel as a big UK steelmaker may not get that benefit as US import rules require steel to be 'melted and poured" in the country of origin, in this case the UK. It is difficult to envisage a more stark repudiation of the rule of law. Amid the disarray, FTAs have become more relevant than ever to India's trade interests. New Delhi is in the thick of negotiations with the US and EU, having recently announced a deal with the UK. The EU, however, is no stranger to unilateral actions. It is, in fact, the chief architect of 'green protectionism'—steps sought to be justified at the altar of climate change. At the heart of both the US and EU measures is the purported belief that these would protect the competitiveness of local industries. While Trump's trade policy antics grab headlines, the EU's measures—ranging from its Carbon Border Adjustment Mechanism (CBAM) and EU Deforestation Regulation (EUDR) to environmental reporting and sustainability due-diligence mandates for corporates—pose significant challenges for Indian industry. India's exports of nearly $100 billion to the EU, comprising mainly fuels, textiles, machinery, chemicals, automobiles, gems, steel and pharma products, account for about 14% of its total merchandise exports. Given this strategic relationship, key concerns must be addressed before finalizing the India-EU FTA. For steel and aluminium, even if the EU's current Most Favoured Nation (MFN) duty rates are reduced to zero in the FTA, the CBAM would negate that benefit. Also, the CBAM's impending expansion to indirect emissions from electricity will make the duty impact much greater, effectively blocking exports to the EU. The EU's proposed de minimis threshold exempting small importers from CBAM obligations offers little relief, particularly for smaller producers which already face numerous non-tariff barriers. In addition, the EU has safeguard measures in place for various categories of steel imports, including tariff rate quotas that may be extended to other metals. The recently announced European Steel and Metals Action Plan will further tighten trade defence measures, presenting further challenges for our exports to the EU. India will need to negotiate each of these aspects carefully under the bilateral FTA to mitigate the impact on Indian industry. The EU proudly claims the EUDR will guarantee that the products EU citizens consume do not contribute to deforestation or forest degradation worldwide. Underneath that claim, however, lies clever legal drafting that will advantage EU's own producers over importers. The EUDR obligates importers to ensure that imports are not from land that has been deforested or subject to forest degradation since 31 December 2020. Degradation is defined as conversion of primary forests or naturally regenerating forests into plantation forests or other wooded land. It is estimated that the EU has only 2-3% primary forest cover, while India has almost 23%, which makes the disproportionate impact evident. Also Read: Why Eurozone expansion should be welcomed around the world The EU's sustainability directives, while aiming to increase business transparency and accountability, will raise India's Inc's cost of doing business in that region. It is no longer sufficient for a company to ensure compliance with labour and environmental laws; it will also have to take responsibility for compliance by each player in its direct and indirect supply chain. The EU is also reportedly seeking a chapter on Energy and Raw Materials in the FTA. We should be wary of obligations curtailing India's policy space for local sourcing or putting in place export restrictions and offering fiscal incentives for its own capacity creation. The EU's emphasis on securing access to raw materials for its own green transition can be in sync with our goals only if there is a level playing field for Indian access to resources and technologies, and India not treated as a mere raw material supplier. Achieving a win-win in EU-India negotiations needs us to take each of these aspects into account. The authors are, respectively, partner, Clarus Law Associates, and a corporate economist based in Mumbai. Topics You May Be Interested In Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
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Business Standard
6 days ago
- Business
- Business Standard
Auto industry has resilience to tackle rare earth issue: HD Kumaraswamy
The government is actively engaging with EU to ensure that concerns of Indian companies and hard-to-abate sectors are adequately addressed under CBAM, says union minister of heavy industries and steel premium Puja Das New Delhi Listen to This Article With nearly 40 end-user import certificates awaiting Chinese approval, India has been grappling with Beijing's restrictions on rare earth or permanent magnet exports since April 4. Though inventories are estimated to taper off by mid-July for certain automotive applications, HD Kumaraswamy, Union minister of heavy industries and steel (MHI), in an interview with Puja Das in New Delhi, says the Centre is actively working with industry associations to resolve the issue at the earliest. Edited excerpts:
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First Post
12-06-2025
- Business
- First Post
Does India trust Trump? It's not about personality X or president Y, says Jaishankar
External Affairs Minister Dr S. Jaishankar said India's relationship with the United States is extremely important, and it is not just about 'President X' when asked if New Delhi trusts Donald Trump read more External Affairs Minister Dr S. Jaishankar said the relationship with the United States is extremely important to India, regardless of who is the president of the country. The remarks from the Indian diplomat came in an interview with European news outlet Euractiv when he was asked about whether 'India trusts US President Donald Trump'. 'I take the world as I find it. Our aim is to advance every relationship that serves our interests, and the US relationship is of immense importance to us. It's not about personality X or president Y,' Jaishankar told the European news outlet. STORY CONTINUES BELOW THIS AD The conversation took place during Jaishankar's visit to Belgium's capital, Brussels, where he held talks with the leaders of the European Union. On Tuesday, he met EU Chief Ursula von der Leyen and EU Foreign Policy Minister Kaja Kallas as India and the EU negotiated the highly anticipated Free Trade Agreement. Where India stands in the geopolitical order When asked where India sees itself in the geopolitical order, Jaishankar emphasised how the world is becoming more multipolar. 'Multipolarity is already here. Europe now faces the need to make more decisions in its own interest – using its own capabilities, and based on the relationships it fosters globally,' the Indian external affairs minister told Euractiv. 'I hear terms like 'strategic autonomy' being used in Europe – these were once part of our vocabulary. The EU plays a major role in the global order and is increasingly an autonomous one. That is precisely why I'm here: to deepen our relationship in this multipolar world," he added. During the interview, Jaishankar admitted that Europe is becoming far more realistic lately. However, he maintained that India continues to have 'deep reservations' about the EU's Carbon Border Adjustment Mechanism (CBAM), which is the tax that the EU imposes on products from jurisdictions where climate policies are not robust. 'The idea that one part of the world will set standards for everybody else is something which we are against. We have very deep reservations about CBAM, and we've been quite open about it," the EAM explained. Jaishankar went on to reiterate Prime Minister Narendra Modi's promise of signing an India-EU FTA by the end of the year.
The Hindu
12-06-2025
- Business
- The Hindu
Addressing non-tariff barriers key for India, EU trade pact, says Piyush Goyal
Finding solutions to address non-tariff barriers would be important for the proposed free trade agreement (FTA) between India and the European Union (EU) and both sides are actively working on resolving these issues, Commerce and Industry Minister Piyush Goyal said on Thursday (June 12, 2025). He said the two sides are "pretty" close to finalising the talks for the proposed free trade pact. "Significant progress has been made. More than half the chapters are ready. In terms of content, I would say we are almost 90 per cent ready for market access. The important issues to be addressed are non-tariff barriers and how we will make it smoother, easier, and better to do business between the EU and India," Mr. Goyal told reporters in Stockholm. He added that both India and the EU are in active discussions to find solutions to make business smooth for companies of both sides. "Unless countries recognise that over regulation and barriers to trade will be met with reciprocal action, everybody suffers. We are committed to deregulation, to finding solutions to the high cost of regulation, the non-tariff barriers that these regulations cause and the impediments to free trade. I am quite hopeful that we will find very robust solutions to this problem," the Minister said. He is here on an official visit to meet his Swedish counterpart and companies for promoting trade and investments between the two countries. Sweden is a member of the 27-nation EU bloc. Key Indian exports that routinely face high barriers in the EU include — chillies, tea, Basmati rice, milk, poultry, bovine meat, fish, chemicals products. Most non-tariff measures (NTMs) are domestic rules created by countries with an aim to protect human, animal or plant health and environment. NTM may be technical measures such as regulations, standards, testing, certification, pre-shipment inspection or non-technical measures like quotas, import licensing, subsidies, government procurement restrictions. When NTMs become arbitrary, beyond scientific justification, they create hurdles for trade and are called NTBs (non-tariff barriers). India's exports are far below potential as they face NTBs in regions, including the EU, the US, China, Japan, and Korea. According to think tank GTRI, the EU has set MRL (minimum residual limit) for tricyclazole, a fungicide in rice, to 0.01 mg per kg as against the ten times higher limit earlier. Similarly, the EU has set MRL for aflatoxins B1 level in chilies and other spices at 5 to 10 ppb (parts per billion). The minister said negotiations on services and rules or origin have started. To give an impetus to the ongoing talks for the FTA, EU Commissioner for Trade and Economic Security Maros Sefcovic is expected to visit New Delhi on June 28-29. On the Carbon Border Adjustment Mechanism (CBAM), Goyal said this measure is "not good" as it is also a kind of a non-tariff barrier. This carbon tax, if imposed, will do injustice to Indian industry, he said, adding that if the EU will take any such step, India will have to respond to that. FTA talks are happening in a good environment and it will not be good to impose carbon tax on Indian goods, he added. "Our talks are going on the issue to find ways to deal with this," the minister said, adding that some good solutions will come out on this. On February 28, Prime Minister Narendra Modi and European Commission President Ursula von der Leyen agreed to seal a much-awaited free trade deal by this year amid rising concerns over US President Donald Trump's policy on tariffs. In June 2022, India and the 27-nation EU bloc resumed the negotiations after a gap of over eight years. It stalled in 2013 due to differences over the level of opening up of the markets. India's bilateral trade in goods with the EU was $136.4 billion in 2024-25 (exports $75.75 billion, imports $60.65 billion), making it the largest trading partner of India for goods. The EU market accounts for about 17 per cent of India's total exports, while the EU's exports to India make up 9% of its total exports. EU's investments in India are valued at over $117 billion with around 6,000 European companies present in India. India's investments in the EU are valued at around $40 billion.
