00:01Since January 1, every time steel from India arrives at a port in the European Union,
00:07a compensatory levy must be paid.
00:10This is because unlike their European counterparts,
00:13Indian producers do not have to pay for carbon emitted in the production of steel.
00:18But this is met with little understanding among Indian steel manufacturers
00:22and led to heated discussions as the EU and India negotiated a free trade deal.
00:28Indian experts say the EU's carbon fee, imposed under its flagship scheme,
00:33Carbon Border Adjustment Mechanism, or CBAM, is a protectionist measure in the guise of decarbonisation.
00:40The whole chaos in climate change and global warming, we are hardly responsible.
00:46That is what the Indian manufacturers feel. The EU is one of the main emitters, historically.
00:51But it isn't just the carbon tax that has given the negotiators,
00:55shuffling between Brussels and Delhi, sleepless nights.
00:59A few months ago, as the EU proposed to double the tariffs on imported steel
01:03and slash the duty-free quota nearly by half, Indians were livid.
01:08Nearly half of India's steel exports end up in the European Union.
01:12A spike in tariffs and a reduction in quota, in addition to a carbon tax,
01:17will make Indian steel exports less competitive.
01:20For its part, the EU Steel Association says an increase in tariffs is a lifeline for the domestic industry.
01:27It claims hundreds of thousands of jobs have been lost due to a flood of cheaper steel imports from countries like India.
01:34It is, of course, important to understand that India has, for many years, increased its exports to the European Union,
01:43has contributed to the downwards trend in the European steel industry,
01:49and therefore, of course, we need also discuss with India how to improve that situation.
01:56Experts believe there is a way out.
01:58The EU will still be importing 18,000 tons of steel duty-free,
02:03and a large portion of this could be allocated to Indian companies.
02:07And as the air quality in India plummets, the EU could help India develop its nascent carbon pricing system
02:14under what it calls a carbon credit trading scheme.
02:18Part of it is going to be how to facilitate investments in India on the green value chain.
02:23Part of it is going to be how to provide assistance to India to help India to progressively reinforce their carbon pricing mechanism.
02:33And as part of that, there should be specific support to facilitate compliance with the reporting requirements
02:40under SIVA, particularly for small and medium enterprises.
02:43And yet, observers expect that steel will remain a bone of contention even with a free trade agreement.
Comments
1