If EU imposes carbon tax, India will retaliate, says Piyush Goyal

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India will retaliate if the European Union (EU) imposes the carbon border adjustment mechanism (CBAM), Commerce and Industries Minister Piyush Goyal said on May 6, adding that such a blanket non-tariff barrier will only lead to a decline of the EU.

“I have stated it clearly to the EU that if CBAM is implemented, India will retaliate. It will lead to a decline of Europe as it will actually lead to inflation and infrastructure becoming more expensive. But in Europe’s decline, there will be immense opportunity for India. It will open up a much bigger market for us,” Goyal said in his address at Columbia India Energy Dialogue, 2025.

Minister Goyal said the same goes for the United Kingdom (UK) if they impose CBAM, a draft policy for which was released last month by the UK. “It will be silly to put tax on friendly countries like India. Hope wiser sense will prevail on friendly countries,” he added.

This was Goyal’s first comments in India after his return from a three-nation visit that covered London, Oslo and Brussels.

Also Read: Equal focus on tariff and non-tariff barriers in trade talks with EU: Piyush Goyal

For India, the biggest sticking point in trade talks with EU has been the CBAM, a measure approved in 2023 and expected to be implemented from January 2026. This proposal seeks to impose tariffs on imports of high-carbon goods including steel, cement and aluminium, aiming to reach net-zero greenhouse emissions by 2050.

Goyal further said that conversations around climate change are dwindling globally. “The polluter pays principle needs to be universally accepted by developed countries. We need to recognize the importance of per capita emissions. India supports 17 percent of the world population, but has contributed to only 3 percent of global emissions, while the developed nations have emitted far more. The real problem is of consumption waste, which the developed nations are refusing to acknowledge,” he said.

Goyal, however, refused to clarify if the talks around tariff negotiations with the US could be concluded within the 90-day pause period.

When asked about trade negotiations with the United States on tariffs, Goyal said India and America share interests for global good. “Conversations are going fabulously well. Out target is to increase bilateral trade to $500 billion by 2030. When we talk of self-reliance, it is in terms of critical products. No country can produce everything. Simultaneously, we also need to open doors wider for global trade, exchange of technologies and people. India’s and the US’ economies are totally complementary to each other except in a few products,” he said.