New Delhi: Union Minister Piyush Goyal addressed concerns regarding the potential impact of the European Union’s carbon tax on the India-EU Free Trade Agreement (FTA), stating that the pact is designed to safeguard Indian industries from adverse effects while promoting joint cooperation to decarbonise the economy. Speaking to ANI on whether the carbon tax could offset the benefits of the India-EU FTA, Goyal emphasised that the agreement includes a “most favoured nation” clause, which ensures that if the EU grants any concessions on carbon tax to other countries, India will automatically benefit from them.
A technical committee will be established to review carbon pricing in both Europe and India, allowing for credit to be given for carbon taxes paid in India. This committee will also facilitate verification processes within India, eliminating the need for verification to be done in Europe. Goyal said, “Critics are not able to understand that we have been able to extract so many concessions and benefits from the European Union, including the fact that there will be most forward nation clause. If they give any concessions to any country on the carbon tax, we will get it simultaneously. We will also have a technical committee to review the carbon pricing in Europe and in India and give credit for what carbon taxes are paid in India”.
“The verification process will not have to go to Europe. They also recognise that India is rapidly moving up the value chain in terms of green energy and in terms of sustainable manufacturing practices. Recognising that, they want to support India’s efforts to decarbonise to protect the environment. Therefore, we have a very holistic agreement which not only safeguards us from any adverse impact of carbon taxes but in fact promotes joint cooperation to decarbonise our economy”, Minister Piyush Goyal further explained. Earlier in January, Congress leader Jairam Ramesh had suggested that the India-EU FTA must account for what he termed as “unacceptable non-tariff barrier”, referring to the European Union’s CBAM (Carbon Border Adjustment Mechanism) that is implemented fully from 2026.
Goyal also allayed any fears about a possible impact on India’s agriculture sector, saying that the FTA will benefit farmers with new markets opening. “There is absolutely no problem for the farmers. On the contrary, new markets open up for them. For example, our rice, wheat, soy, maize, corn, dairy products, cereals, pulses and all such commodities produced in India have been excluded from this agreement. The agricultural sector and the animal husbandry sector are completely protected under this agreement”, the Minister said Earlier, Goyal hailed the India-EU Free Trade Agreement(FTA) as a landmark deal that places India at the high table of geopolitics.
Speaking to the ANI on the FTA, Goyal emphasised that the agreement is a win-win deal that will drive economic growth and create new opportunities for Indian businesses and citizens. Goyal highlighted the potential benefits of the FTA for India’s textile sector, which is expected to see a significant boost in exports. Goyal said, “This FTA between the EU and India places India at the high table of geopolitics. Under Prime Minister Modi’s leadership, India has gained recognition and importance across the world. The world sees India as the fastest-growing large economy, a country with strong macroeconomic fundamentals and a nation experiencing rapidly increasing demand generated by its 1.4 billion people, an aspirational, young India full of talent and skills”.
Today, India is sought after as a trading partner and strategic ally by developing nations across the globe. In the past, India was hesitant about such agreements; we used to be defensive, cautious and reluctant to take on big challenges. Under PM Modi, India now aspires to become a developed nation, a Viksit Bharat, by 2047. This goal is not achievable without expanding our international presence, business and engagements. This FTA with 27 countries, developed nations with whom we do not compete, allows for mutual complementarity. They have different skills and products and we have ours. Together, we become a force multiplier. That is the significance of this agreement”, he added.
India and the European Union (EU) on January 27, Tuesday announced the conclusion of negotiations for a Free Trade Agreement (FTA), an important milestone in one of India’s most strategic economic partnerships. Designed as modern, rules-based trade partnership, the FTA responds to contemporary global challenges while enabling deeper market integration between the world’s fourth and second largest economies.
With a combined market estimated at over Rs. 2091.6 Lakh Crore (USD 24 trillion), bringing unparalleled opportunities for the 2 billion people of India and the EU, the FTA unlocks significant potential for trade and innovation. The FTA delivers unprecedented market access for more than 99 per cent of India’s export by trade value, while preserving policy space for sensitive sectors and reinforcing India’s developmental priorities.
(With Inputs from ANI)
