India warns EU over airline carbon tax
India has made a veiled threat to ban EU airlines from its airspace if Brussels goes ahead with sanctions against Indian airlines in a dispute over carbon tax.
India has made a veiled threat to ban EU airlines from its airspace if Brussels goes ahead with sanctions against Indian airlines in a dispute over carbon tax.
Dozens of countries, including the US and Russia, have attacked Brussels for making all airlines flying into the EU subject to its carbon emissions trading scheme from this year.More News From Financial Times
India warns EU over airline carbon tax Delay EU carbon levy, says air industry Tracking the aviation emissions row Brussels rejects air industry move on carbon US warns over EU stance on airline emissions Last week Indian and Chinese airlines refused to share data with the EU on how much carbon they had emitted in 2011 - the most serious revolt against Brussels' scheme to charge carriers for their pollution. The airlines - two from India and eight from China - risk being banned from flying to EU countries if they persistently refuse to comply with its carbon emissions trading scheme. As yet, the bloc is not actively considering sanctions.Ajit Singh, civil aviation minister, said in an interview with the Financial Times on Wednesday: "Travelling is always a two-way traffic. If they can impose sanctions so can other countries."The minister said India was willing to find a solution to the problem but added that talks should be on a multilateral platform and a decision should not be rushed. Mr Singh said sanctions would be counterproductive for both the EU and India at a time when the European debt crisis and slowing consumer demand were strangling economic growth. "A trade war is not in anyone's interest and I think reason should prevail ultimately," he said.The minister said it was unacceptable for the EU to impose its own rules on Indian companies. "[The EU] is a sovereign union, they can make laws for themselves but they cannot make laws for the whole world," he said. "If you allow this, next they will impose a carbon tax on shipping or cement."The looming threat of sanctions against Air India and Jet Airways - the only two Indian carriers flying from Europe - comes as the country's airlines are beset by high taxes, soaring fuel prices and a bruising domestic price war.Air India, the national carrier, has been on the verge of bankruptcy for more than a decade despite the government injecting billions of dollars to keep it flying. Mr Singh, who indirectly controls the airline since he became aviation minister in December, said the latest bailout package worth about Rs 300bn (USD 5.4bn) could be the last one unless the state-owned airline started performing. "Air India is in a big financial problem," Mr Singh said. "We can't keep pouring money - its public money." Air India pilots have been on strike for 16 consecutive days due to pay and training disputes. Mr Singh, who is in favour of privatising state-owned companies operating in services industries, said the cabinet had not considered selling a stake in Air India. But he added that in the future it could be on the table. A spokesman for Connie Hedegaard, the EU climate commissioner, declined to comment on Mr Singh's veiled threat of sanctions.However, the spokesman welcomed Mr Singh's willingness to pursue a global solution to airlines' carbon emissions, highlighting how the International Civil Aviation Organisation, a UN agency, is considering potential schemes.He added that, with political support from relevant countries, the ICAO should be able to finalise a solution before April next year, when airlines must demonstrate further compliance with the EU scheme.The EU is willing to consider amending its scheme if an ICAO-sponsored solution is finalised. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
