Commerce and Industry Minister Piyush Goyal once again warned that India would retaliate with taxes of its own if Europe goes ahead with its Carbon Border Adjustment Mechanism (CBAM) plan.

The CBAM is basically a mechanism through which European countries would impose a carbon tax on select imports. 

“If they put in a carbon tax, we will retaliate,” Mr. Goyal said, while speaking at the 2025 Columbia India Energy Dialogue, hosted by Columbia University’s Center on Global Energy Policy. “They will put it on products that will hurt their economy and the retaliation will be on products which will further hurt their economy.”

Mr. Goyal has previously — as far back as 2023, for example — also spoken about how India would retaliate to CBAM.

“India has contributed to only 3-3.5% of the carbon emissions,” he said on Tuesday. “We support 17% of the world population. Yet, if we are going to be asked to contribute at the same level as a European company, I think that is going to be patently unfair, improper and irregular.” 

However, at a time when India has successfully concluded a Free Trade Agreement with the United Kingdom on Tuesday, Mr. Goyal painted a fairly rosy picture of the trade talks with the U.S. and Europe as well. 

“Trade talks with Europe are continuing well and are separate from climate issues,” he said, adding that talks with the U.S. are “going fabulously well”. India is in talks with both regions to conclude trade agreements with each.

Industry organisations on Tuesday welcomed the India-UK Free Trade Agreement (FTA), asserting it will significantly support Indian exporters aiming to expand their presence in the UK market, particularly in the face of current global economic uncertainties. The agreement aspires to elevate bilateral trade to USD 100 billion by 2030. Experts cited by news agency PTI emphasised that the FTA’s success will hinge on effective implementation and the capacity of Indian businesses to capitalise on enhanced market access while navigating competition from UK imports. Industry leaders underscored that the FTA would provide a strong push to sectors such as fast-moving consumer goods (FMCG), healthcare, and innovation-led enterprises. Ficci President Harsha Vardhan Agarwal said, “Guided by Prime Minister Modi’s bold and strategic leadership, this milestone reflects India’s growing stature as a global economic force and a trusted partner in progress.” The agreement, Ficci noted, comes at a critical time when global trade dynamics remain uncertain, offering Indian exporters a valuable opportunity to strengthen their foothold in the UK.Also read: Piyush Goyal lauds India-UK Free Trade Agreement Echoing similar sentiments, Confederation of Indian Industry (CII) President Sanjiv Puri said, “This significant agreement reflects our shared commitment to deepening economic ties, bolstering technology collaboration, diversifying global supply chains, and fostering a more business-friendly environment.” “Guided by the 2030 roadmap, the timely agreement will help advance a comprehensive strategic partnership between India and the UK, steering bilateral trade towards the ambitious target of USD 100 billion by 2030,” he added. Sudarshan Venu, managing director of TVS Motor Company, highlighted the deal’s potential to enable Indian firms like TVS Motor to grow globally saying, “We really appreciate the effort taken by the government to make this historic India-UK Free Trade Agreement. Our British brand Norton will launch later this year and this agreement will help us scale faster and leverage common supply chains. We are excited as we further progress towards Viksit Bharat.” Rishi Shah, partner and economic advisory services leader at Grant Thornton Bharat, said, “The UK-India FTA… promises significant growth in bilateral trade… The deal’s success will ultimately depend on implementation and whether Indian businesses can leverage new market access while navigating competitive pressures from UK imports.” Mayank Jain, Partner at Khaitan & Co, added, “The substantial duty reductions across various tariff lines are expected to enhance market access and foster long-term economic benefits for both nations. Moving forward, the emphasis should be on implementing best practices and adopting a phased approach to further strengthen and deepen trade relations.”Also read: India, UK forge Free Trade Agreement, PM Modi terms it ‘historic milestone’The trade deal removes customs duties on 99 per cent of Indian goods entering British markets, whilst providing opportunities for Indian professionals to work in Britain, maintaining the UK’s current points-based immigration system. The United Kingdom and India, ranking as the world’s sixth and fifth-largest economies, concluded their negotiations after three years of periodic talks.The bilateral trade between India and the UK increased to $21.34 billion in 2023-24, up from $20.36 billion in 2022-23. During April-January 2024-25, the trade exchange amounted to $21.33 billion, exceeding the previous period’s figure of $20.26 billion. India continues to maintain a positive trade balance in this bilateral relationship.According to government representatives, this trade arrangement is advantageous for both nations. The agreement is expected to enable Indian consumers to access superior products at competitive prices, which would boost domestic consumption and economic development. Additionally, it provides British enterprises with opportunities in India’s large and growing marketplace, aligning with the UK government’s economic growth strategies, according to officials.Read more: What does the UK-India FTA mean for India? Top benefits – from cheaper cars, whisky to cheer for Indian professionals

Prime Minister Narendra Modi during a bilateral meeting with U.K. Prime Minister Keir Starmer on the sidelines of the G20 Summit, in Rio de Janeiro. File
| Photo Credit: PTI

India and the U.K. on Tuesday (May 6, 2025) sealed an ambitious free trade deal along with a double contribution convention with Prime Minister Narendra Modi saying that the landmark pacts will catalyse trade, investment, growth and job creation in both the economies.

Mr. Modi made the announcement on the agreements after a phone conversation with his British counterpart Keir Starmer.

“In a historic milestone, India and the U.K. have successfully concluded an ambitious and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention,” Mr. Modi said in a social media post.

EXPLAINED | India’s proposed free trade agreement with the U.K.

“These landmark agreements will further deepen our Comprehensive Strategic Partnership, and catalyse trade, investment, growth, job creation, and innovation in both our economies,” he said.

Mr. Modi said he was looking forward to welcoming Mr. Starmer in India soon.

The leaders described it as a historic milestone in the bilateral Comprehensive Strategic Partnership that would foster trade, investment, innovation and job creation in both the economies. Both agreed that the landmark agreements between the two big and open market economies of the world will open new opportunities for businesses, strengthen economic linkages, and deepen people-to-people ties.

Also Read | India committed to Free Trade Agreement with the U.K., says Modi

The Prime Minister’s Office said the two leaders agreed that expanding economic and commercial ties between India and the U.K. remain a “cornerstone” of the increasingly robust and multifaceted partnership.

“The conclusion of a balanced, equitable and ambitious FTA, covering trade in goods and services, is expected to significantly enhance bilateral trade, generate new avenues for employment, raise living standards, and improve the overall well-being of citizens in both countries,” it said.

“It will also unlock new potential for the two nations to jointly develop products and services for global markets,” it added.

“This agreement cements the strong foundations of the India-U.K. Comprehensive Strategic Partnership, and paves the way for a new era of collaboration and prosperity,” the PMO said in a statement.