New Delhi, Mar 21 (KNN) The European Union’s (EU) proposal of carbon tax has raised concerns in the trade community all over the world including India’s metal producers.

From 1 October this year, iron, steel, and aluminium exports to EU countries from across the world will face added scrutiny under the bloc’s Carbon Border Adjustment Mechanism (CBAM), or carbon tax.

In India it has raised concerns among metal producers, who fear it will create a new trade barrier for exports to Europe.

It is expected to disrupt over USD 8 billion worth of Indian metal exports to the EU, and India is planning to impose retaliatory tariffs on European Union exports as a response to the bloc’s proposed carbon tax.

Suppliers will have to report greenhouse gas emissions ‘embedded’ in their consignments before taxes are levied from 1 January 2026.

Several countries, including India, have called the measure discriminatory and running against internationally accepted principles that give developing countries greater flexibility in climate change policies as they are not historically responsible for creating the crisis.

To be sure, the European Parliament is yet to formally clear the proposal. When it does become law, its compliance with World Trade Organization principles could be tested.  (KNN Bureau)