Policymakers worldwide are seeking to reduce carbon emissions in their fight against climate change, with steel traditionally among the most polluting industries.
The Standing Committee on Commerce also recommended that a robust mechanism to support and equip MSMEs to counter the adverse effects of CBAM must be implemented on priority basis.
This assumes significance as India exports over 15 per cent of its total goods exports to the EU. In 2022-23, India exported goods worth $75 billion to the EU.
The think tank in its report claimed that the real reasons the EU introduced CBAM are to protect uncompetitive local industries from cheaper imports; to earn considerable revenue to fund its budget; and to operationalize the trillion-dollar subsidy initiative. "If this disrupts world trade, the EU is okay. The EU needs this money to continue to provide substantial subsidies to its firms and farmers. The new regulations can provide a full share of the EU budget," Srivastava said.