EU Carbon Border Tax hit on Indian exports may exceed US$ 1.3 Bn: GTRI Report

New Delhi, May 19 (KNN) Exports of products like coffee, leather hides and paperboard worth USD 1.3 billion annually to the European Union (EU) will be wedged because of deforestation regulation adopted by the bloc earlier this week, said Global Trade Research Initiative (GTRI) on Thursday.

On May 16, the EU Council adopted Deforestation-Free Products Regulation (EU-DR) within three weeks of introducing the carbon border tax, reported ET.

GTRI said that the EU-DR appears to prioritise protecting its own agricultural sector and promoting exports, making imports more difficult as it is a trade barrier disguised as a green measure. 

The regulation covers cattle, buffalo, the meat of bovine animals, preparations, Oil cake, soya beans, palm oil, cocoa bean, powder, chocolate, coffee, leather hide, skin, paper, paperboard, wood, woodarticles, wood pulp, boards and wood furniture. 

To pass under the regulation the exporters will now have to ensure that these products have been grown on land, which has not been deforested after December 31, 2020.

The new rules will apply to large firms after 18 months and small firms after 24 months.

Thus, the timeline for large firms is December 2024 and for small firms is June 2025.  (KNN Bureau)