The European Union and India have reached an agreement to establish a free trade agreement (FTA) that does not include any exceptions or special conditions under the Carbon Border Adjustment Mechanism (CBAM). This approach was confirmed by representatives of the European Commission.
This is reported by Finway
Terms of the Agreement and the EU’s Position on CBAM
As reported by the chief spokesperson of the European Commission, Paola Pinho, the EU has not undertaken any commitments to modify the CBAM mechanism or to introduce a more favorable regime for India. She noted that the conditions for India under this mechanism will not differ from those applicable to other countries.
“The EU is not undertaking any commitments to change the CBAM or to implement a more favorable regime for India. There will be no conditions for India that are more advantageous than those for other countries,” emphasized Pinho.
The FTA includes a separate section dedicated to climate change and decarbonization issues. The parties also agreed to cooperate in these areas in the future.
Negotiations and Cooperation Plans
According to another senior EU official, the CBAM issue remained one of the most contentious alongside issues related to steel and the automotive industry. During the negotiations, India initially took a hard stance on the CBAM mechanism; however, the signed agreement creates conditions for further technical dialogue on this topic.
The EU and India have committed to establishing a joint platform for discussing climate action issues in the first half of this year. Additionally, over the next two years, the European Union will allocate €500 million to India to support its efforts in reducing greenhouse gas emissions.
During the negotiations, India expressed concerns that the EU might grant certain concessions to the United States under the trade agreement. However, as European officials noted, the bloc refused to change the collection requirements or to establish more flexible CBAM rules for Indian companies. At the same time, the EU confirmed that it would not offer other countries conditions more favorable than those for India.
EU legislation already contains provisions that prohibit establishing special regimes for individual countries under the CBAM mechanism. Since 2021, India has repeatedly criticized this mechanism.
In the steel sector, India received a duty-free quota for exporting metal products to the EU of 1.6 million tons per year, which accounts for approximately half of its annual shipments to this region.