[India’s Iron and Alumina Exports to UK Face Carbon Tariff Despite New Trade Deal]
Despite the recent Free Trade Agreement (FTA) between India and the UK, Indian exports of carbon-intensive goods—such as iron, steel, and alumina—remain subject to potential tariffs under the UK’s Carbon Border Adjustment Mechanism (CBAM).
An estimated US$775 million worth of Indian goods could be impacted, with tariffs reaching up to 35%. CBAM, originally introduced by the EU and later adopted by the UK, is designed to price carbon emissions embedded in imported products.
During negotiations, India sought exemptions for its micro, small, and medium enterprises (MSMEs), citing the challenge of meeting complex data requirements and the risk of exposing sensitive trade data. The issue remains a sticking point despite the broader benefits promised by the FTA.
