India's exports to EU threatened by green initiatives: Think Tank report

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India's exports to EU threatened by green initiatives: Think Tank report

India's exports to EU threatened by green initiatives: Think Tank report

Industry News
Oct 04,23

According to the report by the Centre for Energy, Environment, and Water, this impact could account for 43% of India’s exports to the EU, a significant market for India second only to the United States.

India's exports to EU threatened by green initiatives: Think Tank report

A recent report from a Delhi-based think tank has highlighted concerns about India’s exports to the European Union (EU), valued at $37 billion, being adversely affected by the EU's proposed Carbon Border Adjustment Mechanism (CBAM) and other green initiatives. According to the report by the Centre for Energy, Environment, and Water, this impact could account for 43% of India’s exports to the EU, a significant market for India second only to the United States.

The report identifies various sectors in India's foreign trade that are at risk due to EU regulations, including textiles, chemicals, specific consumer electronics, plastics, and vehicles, collectively constituting 32% of India’s exports to the EU in 2022. If CBAM sectors are included in this list, the exports at risk amount to $37 billion, representing the aforementioned 43% of India’s exports to the EU in 2022.

Developed nations have increasingly implemented non-tariff measures focusing on sustainability, environment, and climate change, such as energy efficiency, carbon footprint reduction, waste management, water management, and sustainable forestry. The report emphasises the urgent need for India to adopt a structured approach to tackle these measures and safeguard its exports.

To address these challenges, the report suggests that India should explore bilateral free trade agreements (FTAs) to establish mutual recognition of compliance assessment activities in respective countries. It cites examples like the EU-Canada Comprehensive Economic and Trade Agreement (CETA) and the EU-Vietnam Free Trade Agreement, demonstrating successful implementation of such approaches.

Additionally, the report underscores the importance of India utilising the World Trade Organisation (WTO) framework effectively. It recommends that India should promptly raise specific concerns within the WTO regarding non-trade measures notifications by other member nations. While India’s involvement in the WTO has increased, the report advocates the development of strategies to utilise the WTO mechanism effectively in the future to voice concerns and seek resolutions.

Source: Business Standard