UK’s Proposed Carbon Border Tax:
India has stated it will retaliate if the UK imposes a carbon tax (CBAM) on Indian exports starting January 2027, calling it a violation of the CBDR (Common But Differentiated Responsibilities) principle under international climate agreements. CBAM is a form of carbon tax on imports imposed by developed countries (like the EU or UK) based on the carbon intensity of production in the exporting country. Aims to prevent carbon leakage by equalizing carbon prices between domestic and imported goods.
The UK’s version of CBAM is expected to start from January 1, 2027. Sectors like steel, aluminium, cement, and energy-intensive goods are likely to be affected first.
