India to oppose EU carbon tax, labour issues at WTO ministerial meet

New Delhi: In the upcoming World Trade Organisation (WTO) ministerial meeting India will contest the European Union’s proposed ‘carbon tax’ and other non-trade barriers created by the developed countries, official sources said.

Two senior officials, who requested anonymity in line with the government’s policy on discussions at the international forums, said India will also pitch for the support of other developing countries like South Africa and Brazil on the issues of common interests.

“Our stand is clear, trade barriers should not be erected under the guise of sustainable development,” he said.

The officials said the developed countries are creating trade barriers in the guise of issues like climate change, labour and women empowerment. There are different multilateral forums like the International Labour Organisation (ILO) and the United Nations for discussing such issues.

One official claimed that several of the issues pushed forward by the European Union and other developed countries are “arbitrary and unjustifiable”.

The official said India’s broad stand on the issue of sustainable development and climate change is: “Any unilateral measures taken to combat climate change should not constitute a means of arbitrary or unjustifiable discrimination or disguised restriction on global trade.”  

The 13th Ministerial Conference of the WTO is scheduled to take place in Abu Dhabi between February 26 and 29. The Ministerial Conference is the highest decision making body of the WTO.  

On the EU's proposed “carbon tax” issue, another official said India will contest the issue at the multilateral agencies including the WTO and also take up the matter bilaterally.

“We will not shy away from discussions,” he said.

The EU recently decided to impose a new tax called ‘Carbon Border Adjustment Mechanism’ on the import of carbon-intensive goods in the region. The new tax regime, which is scheduled to come into effect from January 1, 2026, will be initially applicable to steel, aluminium, cement, fertiliser, hydrogen and electricity, and proposed to be expanded to all imports into the EU in due course.

The official said India is exploring various options including imposition of some sort of carbon tax locally to deal with the EU’s new norms. “We are engaging with the EU to find out how we can comply with that and how our industry and trade do not suffer from this tax,” he said.