India-EU FTA has provisions to address carbon tax, says official

The India-EU free trade agreement includes provisions to address concerns over the European Union's carbon tax, a senior official said on Thursday. Additional Secretary in the Department of Commerce Darpan Jain stated that the deal has a separate annexure dealing with the Carbon Border Adjustment Mechanism (CBAM).

Under one pillar, if the EU extends flexibility to other countries, it will be available to India. Jain noted that CBAM compliance is a concern for small and medium enterprises regarding verification and measurement of embedded carbon. The FTA also allows India to engage with EU authorities to consider carbon prices paid domestically, as India develops its own carbon pricing mechanism.

Jain was speaking at the IGCC Industry Dialogue 2026 in New Delhi, organised by the Indo-German Chamber of Commerce.