In a submission to the World Trade Organization (WTO) last week, New Delhi said that carbon border measures are being selectively applied to “trade-exposed industries” such as steel, aluminium, chemicals, plastics, polymers, chemicals and fertilisers, which reflects the underlying competitiveness concerns driving such measures.
India said WTO rules mandate non-discriminatory treatment for like products, irrespective of their production methods, and discriminatory measures in the form of border measures can lead to “behind-the-border” protectionist practices.
“Any measures taken to combat climate change, including unilateral ones, should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade,” it said.
The statement assumes significance amid the US approving an Inflation Reduction Act to establish green technology industries and the EU’s Carbon Border Adjustment Mechanism, which is a global carbon tax levied on imports to the bloc.
“Carbon border measures that are being considered for imposition on imported products effectively amount to prioritising a singular policy of the importing country over those of exporting countries and will amount to imposing a unilateral vision of how to combat climate change,” India said, underlining the principles of equity and common but differentiated responsibilities and respective capabilities, and the nationally determined contributions (NDCs), it said”Not only will such measures undermine the multilaterally agreed mandate of NDCs of the country of export, but also create distinct preferential treatment for domestic over imported goods,” India said.