EU ‘inviting disaster’ with carbon levy and trade barriers: Piyush Goyal

New Delhi: The Commerce and Industry Minister Piyush Goyal on Thursday criticised the European Union’s carbon levy and expanding regulatory requirements, warning that the measures would raise infrastructure costs, weaken industrial competitiveness and make life more expensive for European consumers.

Speaking at the Berlin Global Dialogue, Goyal said the bloc’s attempts to protect sectors such as steel through higher trade barriers risked damaging its own economy.

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"You put a CBAM (Carbon Border Adjustment Mechanism) on yourself. You put a 50 per cent import duty to bring steel into your country. You're inviting disaster. Your cost of living will go up," he said.

Higher infrastructure costs

Goyal argued that increasingly restrictive standards and protective measures would make key construction materials more expensive, pushing up the cost of infrastructure across Europe.

"Now, imagine going forward, every infrastructure, whether it's a port or an airport or your autobahns in Germany or your expressways, your utilities, your water pipelines, you name the infrastructure with costlier steel, costlier aluminium, costlier cement, with all the overlay of CBAM and deforestation rules," he said.

The minister said the EU had introduced 75–77 regulations, adding that the growing compliance burden was hurting businesses within the bloc while creating obstacles for overseas trading partners.

"We've lost count. You keep adding to your regulations, add to the burden of your industry, make yourself uncompetitive. And of course, in some sense, it'll also create non-tariff barriers for others to trade with you," Goyal said.

Warning of reciprocal barriers

Goyal cautioned that trading partners could respond with restrictions of their own, exposing European businesses to additional hurdles in overseas markets.

"And I don't say that. Much bigger leaders are saying that. And in this reciprocal world, you bring in a regulation and stop some other country from working with you. They'll bring in two regulations, which will hurt your businesses," he said.

He warned that the eventual consequences could include higher inflation, rising living costs and weaker export competitiveness.

"You will not be able to compete in global markets. Your auto industry is suffering that already. I think auto sales are down from Germany by 15 or 20 per cent in the last decade or so," the minister said, adding, "How will you be competitive in the future? You will ultimately outprice your industry."

India seeks complementary partnerships

Outlining India’s approach, Goyal said the country was focused on improving competitiveness and pursuing trade partnerships that offered mutual benefits.

"We've got fair, equitable, and balanced agreements with every one of the partners with whom we are working. At least in the last four or five years, post-2014 particularly, we're forging friendships, basis competitiveness. We are building complementary strengths," he said.

He cited Singapore as a trading partner without comparable CBAM and deforestation-related barriers.

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India has repeatedly raised concerns about the impact of the EU’s environmental trade measures on its exporters, particularly in sectors such as steel, aluminium and cement.

Goyal also said India accounted for only 3–3.5 percent of global carbon emissions despite supporting 17 percent of the world’s population.

Alongside CBAM, India’s concerns extend to the European Union Deforestation Regulation, whose compliance requirements affect producers and exporters in sectors such as rubber seeking access to European markets.

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