India raises concerns over data privacy in compliance with EU’s CBAM

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India raises concerns over data privacy in compliance with EU’s CBAM

India raises concerns over data privacy in compliance with EU’s CBAM

Industry News
Jan 17,24

The CBAM, the world's first system imposing carbon emission tariffs on various imported items, is set to be effective from 2026.

India raises concerns over data privacy in compliance with EU’s CBAM

India has raised concerns about the potential compromise of sensitive and confidential trade data of its exporters as they comply with the European Union's Carbon Border Adjustment Mechanism (CBAM). The CBAM, the world's first system imposing carbon emission tariffs on various imported items, is set to be effective from 2026, but the transition period requiring exporters to submit data to EU authorities commenced on October 1, 2023.

Sectors such as steel, oil refining, and cement, where Indian manufacturing exports align favourably with global cost competitiveness benchmarks, are at the centre of the concerns. Indian exporters fear divulging critical information related to sensitive trade secrets, as the CBAM mandates EU importers to submit around 1,000 data points and production methods used by exporters to ascertain carbon emissions.

India, which exports over 15% of its total goods to the EU, is particularly affected as exports to the EU are already slowing due to weakening demand in the west. In the fiscal year 2022-23, India exported goods worth $75 billion to the EU. The recent crisis in the Red Sea area further adds to concerns about potential impacts on exports of textile and agricultural products to the EU.

Trade experts emphasise the need for the Indian government to scrutinise the data collection by the EU under the CBAM, as Brussels aims to revive manufacturing within its territory and address trade deficits with developing countries like India and China. The Indian government has raised objections to the CBAM at the WTO and is concurrently seeking concessions.

Negotiations with the EU are primarily taking place under the Trade and Technology Council (TTC), a bilateral forum that assumes significance as the EU has such engagements only with the US. Discussions under the TTC cover challenges related to the CBAM, including documentation issues and privacy concerns regarding the sought-after data. While the EU has agreed to incorporate CBAM solutions in the Free Trade Agreement (FTA) under negotiation, the final details, such as a longer transition timeline and concessions for MSMEs, are yet to be agreed upon.

Source: The Indian Express