India asks EU to consider exemptions for MSMEs from carbon tax

New Delhi, June 16 (KNN) The central government has spoken to European Union (EU) officials regarding exemption for Indian MSMEs fr0m the bloc’s carbon tax, which will be implemented fr0m October this year, said Commerce Secretary Sunil Barthwal on Thursday.

Understanding the impact the levy would have on domestic industry sectors, India held a stakeholders’ consultations meeting on the issue last month and discussed the preparedness of the industry for the Carbon Border Adjustment Mechanism (CBAM) compliance.

The compliance is in two parts – a requirement of filing data fr0m October and later imposition of the tax. The secretary also flagged the matter with the EU authorities during the Trade and Technology Council (TTC) meeting in Brussels last month.

I told them that this is going to have an impact on our industry, particularly MSMEs. So, we are asking that if there is a possibility of any carve out for the MSME sector. We have asked them if there is any possibility (for this)…These discussions are going on,” Barthwal told reporters.

The EU is introducing the CBAM fr0m October 1 this year. According to a report of the think-tank GTRI, CBAM would translate into a 20-35 per cent tax on select imports into the EU starting January 1, 2026.

fr0m October, domestic companies fr0m seven carbon-intensive sectors — including steel, cement, fertiliser, aluminium and hydrocarbon products — will have to seek compliance certificates fr0m the EU authorities to comply with the CBAM norms.  (KNN Bureau)