India, EU Agree To Address CBAM Implementation Challenges For SMEs

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New Delhi, Mar 1 (KNN) India and the European Union (EU) have reached an agreement to address challenges arising fr0m the implementation of the Carbon Border Adjustment Mechanism (CBAM), with particular focus on small and medium enterprises. 

This consensus emerged during the second meeting of the India-EU Trade and Technology Council (TTC) held on Friday.

“Both sides discussed the challenges arising out of CBAM implementation, in particular for the small and medium enterprises and agreed to continue addressing them,” stated a joint statement released after the TTC meeting.

INDIA - EU TTC MEETING

CBAM is an EU tool designed to place a ‘fair price’ on carbon emitted during the production of goods.

Tanmaya Lal, Secretary (West) in the Ministry of External Affairs, noted during a press conference, “India has highlighted concerns on CBAM on a number of occasions and has noted the modifications EU has made in its framework to simplify some of its aspects.” 

“We are examining the implications of that and we hope concerns of developing countries are taken into account and addressed suitably,” he added.

The EU’s CBAM will impose taxes on imports of select products including cement, iron and steel, aluminium, fertilisers, electricity, and hydrogen for carbon emissions exceeding a specified threshold. 

Experts suggest that CBAM could potentially undermine benefits India might expect fr0m a Free Trade Agreement between the two regions. India is specifically seeking exemptions for small and medium enterprises within the CBAM framework.

Beyond the ministerial meeting, the TTC’s three working groups also convened. In the Strategic Technologies, Digital Governance and Digital Connectivity working group, both parties agreed to explore joint research and development in chip design, heterogeneous integration, sustainable semiconductor technologies, and technology development for advanced processes for process design kits. 

They also committed to ensuring semiconductor supply chain resilience by developing sustainable, secure, and diversified semiconductor production capabilities.

During the visit of European Commission President Ursula von der Leyen and college of commissioners, a memorandum of understanding was signed between the Bharat 6G Alliance and the EU 6G Smart Networks and Services Industry Association to align research and development priorities and create secured and trusted telecommunications with resilient supply chains.

In the clean and green technologies working group, both sides agreed on joint research cooperation focusing on recycling batteries for electric vehicles, addressing marine plastic litter, and waste-to-hydrogen initiatives. 

A budget of 60 million euros will be allocated for research, with India and the EU contributing equally. The parties also agreed to explore cooperation on harmonising standards for electric vehicle charging infrastructure.

The Trade, Investment and Resilient Value Chains working group expressed satisfaction with progress made in Agri-food, Active Pharmaceutical Ingredients, and Clean Technologies sectors. 

In pharmaceuticals, India and the EU aim to enhance transparency and security in API supply chains by mapping vulnerabilities, promoting sustainable manufacturing, and establishing early warning systems to prevent disruptions.

The TTC meeting was co-chaired by EU representatives including Executive Vice-President for Tech Sovereignty, Security and Democracy Henna Virkkunen, Commissioner for Trade and Economic Security, Interinstitutional Relations and Transparency Maros Šefčovič, and Commissioner for Startups, Research and Innovation Ekaterina Zaharieva. India was represented by External Affairs Minister S Jaishankar, Commerce and Industry Minister Piyush Goyal, and Minister for Electronics and Information Technology Ashwini Vaishnaw.

(KNN Bureau)



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