Finance Minister Nirmala Sitharaman expressed concerns about the imposition of tariffs on high-carbon goods by advanced jurisdictions like the EU. She argued that this one-sided move goes against the interests of the Global South and that the pursuit of a green agenda should not come at the expense of others.
During her speech at the Global Economic Forum 2023, Sitharaman also mentioned that there would be no significant announcements in the Vote On Account. The Interim Budget serves the purpose of meeting the government’s expenditure until a new government takes office. The event was organized by the Department of Economic Affairs in collaboration with the industry body CII.
As elections are scheduled for April-May, the government will present an interim budget for FY25 in February. The final budget for FY25 is expected to be presented in July by the newly elected government.
In advocating for inclusive global growth, Sitharaman emphasized the negative impact of the border adjustment tax logic. She stated that imposing taxes on non-green products to fund the green initiatives of a country only undermines the concerns of the Global South.
Furthermore, Sitharaman stressed that while every country should strive to generate funds for their green commitments, this should not be achieved at the expense of poorer and developing countries. She deemed such an approach as immoral.
The EU’s plan to impose tariffs through the Carbon Border Adjustment Mechanism (CBAM) from 2026, ranging from 20% to 35% on products like steel and cement, was highlighted. A report by Wood Mackenzie suggests that India’s steel exports to the EU would experience a 56% cost increase by 2034 due to the CBAM. The UK is also considering a carbon border tax.
Sitharaman mentioned that Prime Minister Narendra Modi has focused on four pillars, including the poor, farmers, youth, and women. She emphasized the importance of increasing female participation in all aspects of the economy and beyond, from policy-making and boardrooms to businesses and shop floors.
