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India To Fight EU Carbon Tax

by Mary Swire, Tax-News.com, Hong Kong

31 March 2010


If the European Commission or the US imposed a carbon tax on imports as planned, India would fight its case vigorously under the disputes resolution procedures available at the World Trade Organization (WTO), said Indian environment minister, Jairam Ramesh.

After an inconclusive Copenhagen Summit, the US and the EU have been toying with the idea of a carbon surcharge on imports to deter polluters, especially developing nations such as China and India, who may be encouraged to clean up their act in this way.

Carbon taxes have already been introduced in Sweden, Finland and Denmark, and France has been urging for an EU-wide minimum carbon tax to improve Europe's green credentials.

The proposal under consideration by the European Commission, could result in import levies on any goods manufactured using processes not considered environmentally friendly. India's ministry of commerce is concerned that this could affect exports of steel, iron, aluminium, cement and chemicals.

In the negotiations leading up to Copenhagen, India would not agree to link trade and climate matters and resisted any commitment to a legally binding agreement. However it agreed to reduce its carbon emissions voluntarily by 20-25% by 2020.

Ramesh said India would deal with the problem through hard negotiations. He contended that such barriers to trade were not acceptable under WTO rules and could be fought. The European position has been that the import taxes would be non-discriminatory to any particular country or exporter.

TAGS: environment | tax | European Commission | India | law | China | carbon tax | France | trade | Europe

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