Industry must prepare for tariff walls in the name of climate action tax: FM Sitharaman

Finance Minister NIrmala Sitharaman | Illustration: Moneycontrol

The Indian industry should get ready to face "tariff walls" as countries gear up to make the transition to a greener future, Finance Minister Nirmala Sitharaman has said.

Speaking on December 16 at FICCI's annual convention here in the national capital, Sitharaman said these walls would result in higher costs for the domestic industry and the matter would have to be tackled.

"Only recently, a few days ago, I am sure all of you would have read in the media, that there are countries who want to fund their transition from not so green to green production of materials, items like steel...they want to fund their transition by raising tariff walls against countries which send their products as a matter of normal exports," Sitharaman said.

"So when you are going to export your steel, you will be facing tariff walls in the name of climate action tax. This is going to affect us. And this is not something I am speculating on. There are measures announced by countries," she added.

As such, the minister called on the Indian industry to reset itself to be ready for higher tariffs. She added that the government would provide any assistance it could, be it in the form of policy or diplomacy, to help reduce the cost burden.

"Diplomacy helps, and so does policy. So the challenge globally is not just climate change but the challenges are also of policy reflecting the climate change," the finance minister said.