India voices dissent against trade barriers linked to emissions

Last Updated18/11/2024

India has voiced its disapproval of “protectionist” measures that link trade barriers and carbon emissions, at the ongoing climate talks in Baku, Azerbaijan.

India has voiced strong opposition to protectionist measures that link trade barriers to carbon emissions at the ongoing COP29 climate talks in Baku, Azerbaijan. These measures, India argues, unfairly shift the costs of transitioning to low-carbon economies onto developing and low-income countries.

Unilateral Trade Measures and Equity Concerns
India criticized unilateral climate-related trade measures, stating they:
- Discriminate against developing nations.
- Undermine multilateral cooperation on climate change.
- Violate principles of equity by imposing unequal burdens.
China and BASIC Proposal:
- India’s stance aligns with a proposal led by China on behalf of the BASIC countries (Brazil, South Africa, India, and China), which seeks to address unilateral restrictive trade measures.
- The proposal specifically targets mechanisms like the EU’s Carbon Border Adjustment Mechanism (CBAM).
What is CBAM?
- The Carbon Border Adjustment Mechanism is a European Union policy:
- It imposes a tax on imports that fail to meet EU carbon emission standards.
- Currently in a transitional phase, CBAM will be fully implemented on January 1, 2026.

CBAM is perceived as a protectionist trade barrier:
- Penalizes countries with less stringent carbon regulations.
- Shifts the cost of climate action disproportionately to developing nations.

Diplomatic Challenges
- India refrained from directly naming CBAM in official statements to avoid targeting the EU and risking tensions in climate negotiations. Instead, it referred to “arbitrary and unjustifiable unilateral measures.”

India highlighted a recurring issue:
- Climate-related trade measures are dismissed as trade issues at climate forums like COP.
- The same measures are treated as climate issues at trade forums like the World Trade Organization (WTO), creating a policy deadlock.

BASIC countries have united to demand:
- Fair and non-discriminatory climate finance commitments from developed nations.
- Opposition to unilateral trade measures such as CBAM, which hinder equitable climate action.

India’s firm stance underscores the larger debate at COP29 about balancing:
- The need for global climate action with:
  - Equity for developing nations.
  - The avoidance of trade barriers disguised as climate measures.