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Carbon Tax Exemption Yet Another Thorn In India-UK Free Trade Talks

Updated: Apr 20, 2024 02:34:12pm

Carbon Tax Exemption Yet Another Thorn In India-UK Free Trade Talks

New Delhi, Apr 20 (KNN) As negotiations for a free trade agreement (FTA) between India and the United Kingdom continue, a key sticking point has emerged over India's request for exemption from the UK's proposed carbon tax.

According to a report in The Guardian, the UK is unlikely to accept India's plea for an exemption from the planned carbon border adjustment mechanism (CBAM).

The report cites a UK government official familiar with the talks, who stated that India's request for exemption from the CBAM on the grounds of being a developing country would be 'controversial.'

The official explained that the carbon tax plans are designed to reduce emissions and support UK steel producers by leveling the playing field with countries that have lower or no carbon levies.

A four-member team of senior Indian commerce ministry officials is currently in London, having arrived on April 16th, to continue discussions and iron out unresolved issues holding back the FTA.

In addition to the carbon tax, the talks have also focused on India's demand for more visas and mobility rights for its skilled professionals, duty-free access for certain Indian goods, and the UK's demand for market access for British-made electric vehicles.

Despite the FTA talks being described as 'advanced,' these outstanding issues have dragged on, delaying the signing of the agreement.

The negotiations, which began in January 2022 and have seen 14 rounds so far, received a push last month when Prime Ministers Narendra Modi and Rishi Sunak discussed an early conclusion.

(KNN Bureau)


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