By Vijay Jayaraj
Like many developing economies, India faces coercion from the United Nations and Europe to conform to climate policies, especially through the imposition of carbon taxes on imports into their countries. But Delhi is not about to bend to such tactics.
“If they (EU and U.K.) put in a carbon tax, we’ll retaliate,” said India’s Union Minister Piyush Goya at the Columbia India Energy Dialogue in New York City. “I think it will be very silly, particularly to put a tax on friendly countries like India.”
That isn’t a bluff. It’s a moral, strategic and scientific imperative grounded in realpolitik and economic logic.
India and the U.K. have inked a trade deal that promises to boost bilateral trade by more than $33 billion and increase U.K. gross domestic product and wages by many billions.
On paper, this deal is a triumph for both nations, removing duties on 99% of Indian goods entering the U.K. For India, this means greater market access for textiles, agriculture and manufactured goods – sectors that employ millions and drive economic growth.
Yet, the U.K.’s pending Carbon Border Adjustment Mechanism (CBAM) remains in place, with no exemptions for Indian steel, cement and aluminum, despite the trade agreement.
Starting January 2027, the U.K. is to impose a levy on these “carbon-intensive” imports, supposedly to compensate for the difference between the U.K.’s domestic carbon tax and India’s lower assessment at home. The tax on imports is to prevent “carbon leakage” — the idea that emissions are “outsourced” to countries with fewer regulations.
This hocus-pocus is nothing more than repugnant virtue signaling that penalizes manufacturers in developing countries for using the very fossil fuels that powered the West’s rise in the 19th and 20th centuries.
India’s export of these products to the EU and U.K. are a critical part of its economic engine. In 2022 alone, 27% of India’s iron, steel and aluminum exports went to the EU.
Yet, the EU’s CBAM, set to take effect in 2026 prior to the U.K. tax, would slap tariffs of 20-35% on these goods.
For Indian exporters, this translates to a steep cost increase. India’s predominantly coal-based blast furnaces have higher carbon intensity of around 2.5-2.6 metric tons of CO₂ emissions per metric ton of steel produced in comparison to the global average of 1.85 metric tons of CO2 . This means a higher CBAM assessment for India.
Profit margins for steel exports could shrink, while aluminum exporters might face a sudden surcharge once indirect emissions from coal power are factored in. Take the case of Tata Steel, which employs over 75,000 people and produces 30 million tons of steel annually. A 20-35% carbon tax under the EU’s CBAM would erode profit margins, forcing layoffs or price hikes that could cost it market share.
India’s dismissal of the climate war on fossil fuels is grounded in necessity and science. Economically, the nation aims to become a $5 trillion economy by 2027, a goal that demands rapid industrialization and infrastructure growth.
Steel, cement, and aluminum are the building blocks of this ambition, used in everything from bridges to skyscrapers, and an important source of export revenue. Fossil fuels, particularly coal, are the lifeblood of these industries, providing the energy needed to keep production costs low and globally competitive.
Coal generates more than 70% of India’s electricity. It powers the factories that make steel and cement. It keeps the lights on in rural hospitals and schools. And it fuels the economic engine that has lifted 415 million people out of poverty in the past two decades.
The modern crusade against fossil fuels is based on the false premise of a disintegrating global environment. But that is not the case. Carbon dioxide is not a toxin. It is a colorless, odorless gas essential to life on Earth.
Even the term “carbon emissions” is a sleight of hand. The emissions are carbon dioxide, but calling them “carbon” conjures images of potentially harmful soot and smoke. Fear perpetrated by lies have made people less resistant to destructive policies like CBAM.
However, India won’t bow to carbon taxes and it won’t join an unscientific climate war that sacrifices its future. The U.K. and EU would do well to listen, lest they find themselves on the losing end of an Asian-dominated trade battle over manufactured goods.
This commentary was first published at Real Clear World on May 24, 2025.
Vijay Jayaraj is a Science and Research Associate at the CO₂ Coalition, Arlington, Virginia. He holds an M.S. in environmental sciences from the University of East Anglia and a postgraduate degree in energy management from Robert Gordon University, both in the U.K., and a bachelor’s in engineering from Anna University, India.
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Well grounded, thinking people, those Indians.
India should remain a free market to the greatest extent possible. Rather than get into a carbon tax war with the UK and the EU they should add a fee to the price of their steel, aluminum and cement. If they charge India a 100 dollar carbon tax India should add a 100 dollar political fee. No carbon tax no political tax. It’s a win win.
If this occurs would it not increase the prices of India exports having a very negative effect on India’s economy?
Only to those with a carbon tax, no carbon tax no political fee.
Modi and his party strike me as mostly practical. The UK and EU are run by True Believers, the antithesis of being practical.
Good article. The climate crisis is being exposed as a fake crisis.
Fossil fuel plants emit very little carbon. It is fully combusted to carbon dioxide, better known as the molecule essential to photosynthesis. The entire carbon tax scam is a way to transfer money from your pocket into the pockets of rent-seekers. The Indians see this. Why do western politicians not see this? You know why.
Britain has apparently lost track of what steel is used for.
Its used to build stuff. Having already driven their own steel industry out of business, they now propose to drive their industries that use steel out of business. Instead of using the lower cost steel from a friendly nation, they will pay more money to buy steel from someone else, perhaps an adversary. While they are explaining how they are saving the world the industries that need cost effective steel and aluminum will relocate. Just like the steel mills did.
Sri Lanka got woke and went broke. India will not emulate them.
“India’s dismissal of the climate war on fossil fuels is grounded in necessity and science.”
But mainly … science !!
But carbon dioxide doesn’t affect the weather
And drowning witches does not affect quality of milk (so far). Does it matter?
How much does EU still build from steel (other than bird-grinders)?
So, what you are saying is people with functioning brains are in charge in India. Got it.
“Even the term “carbon emissions” is a sleight of hand. The emissions are carbon dioxide, but calling them “carbon” conjures images of potentially harmful soot and smoke.”
Thank you.
Since CO2 does in fact contain carbon, they can rightly be called “carbon emissions”.
Chemistry 101.
By your special needs logic it also contains oxygen so we will now refer to it as “oxygen emissions”
Chemistry 102
I don’t have any problem with calling CO2 emissions as “oxygen emissions” as that is scientifically true.
That fact should have been covered in Chemistry 101, assuming you were paying attention.
BTW, carbon is also found in the form of diamonds and graphite . . . again, Chemistry 101.
Cool so can I now argue it actually contains twice as much oxygen atoms as carbon so that is the major emission so can you please always refer to it as “oxygen emission” because that is the dominate emission.
Will do . . . watch me.
BTW, does “dominate” in number of molecules equate to “dominate” in terms of effect on climate? Consider H2O . . .
/sarc
Mr. Jayaraj,
The very first paragraph in your article above claims:
Really? Are you asserting that India did not willingly sign as a party to the “Paris Agreement”, the “legally binding” international treaty on climate change adopted at the UN Climate Change Conference in Paris in 2015?
Under that treaty, each country set its own (CO2) emission reduction targets, which were to be reviewed for revision every five years. So who or what coerced India to set its emission targets, let alone force the nation to sign the treaty in the first place? IOW, why did India apparently bend—and is continuing to bend—to the “tactics” of the UN and EU if what you claim is true?
Also, if what you assert in that single paragraph had a semblance of truth, why hasn’t India by now withdrawn from being a party to the Paris Agreement?
BTW, India has not met the CO2 emission reduction target(s) it set. It is currently among the countries having the largest year-after-year increases in CO2 emissions. See the attached graph.
Despite hitting this proverbial “brick wall” in your logic, I continued through the rest of your article in hopes of finding clarification of the first paragraph. I didn’t find such, but notice with amusement your reference in one subsequent paragraph to “hocus-pocus”.
IMHO, that term fits your article.
“legally binding” international treaty … ROFL
As you said India has not met the “legally binding international treaty” so what legally binding punishment does India get under the treaty ????? Oh I know a stern talking to by you and the climate train wreck activists.
You would make a good politician they dribble like that but sorry politicians and you are the only ones that take a non punitive treaty seriously.
“The Paris Agreement is a legally binding international treaty on climate change. It was adopted by 196 Parties at the UN Climate Change Conference (COP21) in Paris, France, on 12 December 2015. It entered into force on 4 November 2016.”
(source: https://unfccc.int/process-and-meetings/the-paris-agreement ; my bold emphasis added)
“The Paris Agreement is a short agreement with 16 introductory paragraphs and 29 articles. It contains procedural articles (covering, for example, the criteria for its entry into force) and operational articles (covering, for example, mitigation, adaptation and finance). It is a binding agreement, but many of its articles do not imply obligations or are there to facilitate international collaboration.”
(source: https://en.wikipedia.org/wiki/Paris_Agreement ; my bold emphasis added)
“The Agreement is a legally binding international treaty. It entered into force on 4 November 2016.”
(source: https://www.un.org/en/climatechange/paris-agreement ; my bold emphasis added)
And, for good measure, see the attached screen grab of Google AI’s response.
So, by all means, do continue ROFL in in your ignorance of facts.
And BTW, since you obviously don’t know, there are many legally binding treaties/agreements where penalties are not imposed if the treaty/agreement is abrogated.
Ooops . . . here’s the Google AI response in support of my above comment:
Please don’t bother trying to post bullshit from politicians, activists and AI bots that try to argue “legally binding” can exist if you can’t enforced it. The law stops at the point you can’t enforce it.
In Australia we have our own retard E-safety commissioner who thought she could order an internet wide take down order because her new laws the Australian Parliament seemed to say that. She was shocked to find the actual federal court has eviscerated her law because Australia law stops at any point you can not enforce it, which is the same as your stupidity.
Now feel free to believe the garbage the politicians and AI bots because you seem a bit gullible but for the rest of us the law stops at the point you can enforce it.
Oh, please!
Don’t conflate “can’t enforce it” with “where penalties are not imposed if the treaty/agreement is abrogated”, the phrase I used in my last sentence above in my first reply to you. That’s a very poor attempt at deflection.
As of 2024, adultery remains a crime in 16 US states and Puerto Rico, according to Newsweek and The New York Times (https://www.newsweek.com/map-shows-16-states-where-its-illegal-cheat-your-wife-1887307 ). Do you imagine that’s ever “enforced” with criminal penalties in those states? Nevertheless, couples in the US still enter into legally binding agreements (signing marriage licenses) in those states and Puerto Rico.
As just one other common example, US states may choose not to enforce federal laws if they believe those laws are unconstitutional . . . state law prevails (as legally binding) unless and until the disagreement with Federal law is resolved by the US judicial system, in such disputes often requiring ruling by the US Supreme Court). For example, California currently permits personal use of marijuana whereas it is currently a Federal crime to use marijuana (outside of prescribed medication). The Fed’s don’t have the agents (or trial court resources) to sweep into California to enforce the Federal law, although they have the legal right to do so under the US Constitution as long as the Federal law remains valid.
There is what you would like to assert . . . and then there is reality, for the rest of us, that is.
This was always a bait-and-switch. The Paris Agreement was originally presented and signed as an ‘Executive Agreement” with no legal force. This allowed the Obama administration to sign on without sending it to the Senate for ratification. Later COP meetings then added legally binding targets in order to claim that the parties had legal obligations under the agreement. Any international treaty must be approved by 2/3 of the U.S. Senate to be legally binding, and that never happened, so the U.S. was never bound by it under law, even though some politicians acted like it was.
I disagree.
In recent decades, presidents have frequently entered the United States into international agreements without the advice and consent of the Senate. These are called “executive agreements.” Though not brought before the Senate for approval, executive agreements are still binding on the parties under international law.
(https://www.senate.gov/about/powers-procedures/treaties.htm ; my bold emphasis added)
You can refute the finer points of the article until the next Ice Age, but the reality is that India gets 70% of its electricity from coal-fired generation and plans to add 90GW more of coal-fired capacity by 2032. So it certainly doesn’t intend to let some unenforceable treaty or agreement stand in its way of providing reliable energy sources.
The “finer points”? Hah!
I pointed out the blatant hypocrisy of the above article claiming that India was deciding to go their own way in increasing their use of fossil fuels (and thus increasing their annual CO2 emissions into the global atmosphere) while at the same remaining as a signatory to the Paris climate accords to “limit” future CO2 emissions.
But thank you for at least agreeing with me that India is planning to continue adding to their use of fossil fuels over at least the next seven years.
Watch, India will become USA’s new partner for outsourcing displacing China.
Maybe, maybe not.
China has a greater labor force than India.
China has a more skilled and experienced workforce, particularly in manufacturing.
China is a global leader in robotics, AI, and smart manufacturing, heavily investing in automation and AI-driven factories, whereas India is lagging in automation and AI compared to China.
India’s rejection of a carbon tax reflects the same sentiment as Canada’s. The two leading parties in Canada’s recent federal election both made the cancellation of of carbon pricing a top priority largely because consumers saw it just making living costs higher while having only a minuscule effect on carbon emissions. Besides, polls showed that citizens didn’t consider climate and environmental matters to be anywhere near the top of their priority lists anyway. Chances are excellent that Indians harbor the same opinions; after all, their government has consistently shown that economic development, rising living standards and reliable energy supplies to be at the top of its goals.
So the U$ and the west want the rest of the world to eliminate the use of the fuels that enriched the ‘developed’ world. They want to do this by restricting the economic growth of the rest of the world who will, instead, underpin increased economic growth in the U$ and the west. It doesn’t take a rocket scientist to understand why BRICS is growing steadily – like it or not.
It’s time to put the UN out of its misery. The Utopian inspired League of Nations failed, and we put it out of its misery. Now its time to end the United Nations Utopian fantasy. Think of how much less madness there will be in the world if we stop paying its way.