Piyush Goyal, India's Commerce and Industry Minister, sharply criticized the European Union's new carbon regulations, warning they could lead to economic troubles for the bloc. Speaking at the Berlin Global Dialogue on October 22, 2026, Goyal argued that the EU's decision to impose the Carbon Border Adjustment Mechanism (CBAM) is akin to 'shooting itself in the foot' by increasing regulations and closing its borders.
Goyal highlighted the potential repercussions of the EU's policy, stating that the CBAM will escalate living costs and reduce competitiveness. He pointed out that the EU's extensive regulatory framework, which includes 75-77 regulations, burdens industries and creates non-tariff barriers, ultimately harming its own economy.
The minister emphasized the reciprocal nature of global trade, suggesting that other countries might retaliate with their own regulations, further complicating international trade relations. He warned that such policies could lead to higher inflation and decreased competitiveness in global markets.
Goyal contrasted India's approach to trade, which focuses on enhancing competitiveness and forming balanced partnerships. He noted that India is actively engaging in fair agreements with various partners, avoiding the restrictive measures seen in the EU. India, he said, is building complementary strengths with countries like Singapore, where there are no CBAM or deforestation regulations.
India has consistently expressed concerns about the EU's regulatory measures, particularly the CBAM, which could impose tariffs of 20-35% on Indian exports of steel, aluminum, and cement. Goyal pointed out that India contributes only 3-3.5% to global carbon emissions, despite having 17% of the world's population, and criticized the EU for its significant carbon footprint, which stands at about 20%.
The minister also addressed the EU's anti-deforestation regulation (EUDR), labeling it as a non-tariff barrier that imposes stringent requirements on sectors like rubber production targeting European markets. He argued that the EU's historical reliance on low-cost energy for growth contrasts with India's current efforts to green its steel industry and implement the fastest clean energy program globally.
Goyal criticized developed nations for not fulfilling their climate finance and technology transfer commitments to developing countries. He argued that the CBAM fails to acknowledge the principle of common but differentiated responsibilities, which is crucial for equitable climate action.
