Unilateral And Arbitrary: Finance Minister Nirmala Sitharaman Calls Out EU’s CBAM

Union Finance Minister Nirmala Sitharaman on Wednesday called out the European Union’s (EU) Cross-Border Adjustment Mechanism (CBAM) as unilateral and arbitrary and added that it would hurt Indian industry.

In a keynote interview at the Financial Times Energy Transition Summit India, the minister said that CBAM could potentially harm India’s industries and disrupt the balance in international trade.

“The CBAM which is coming which is going to hurt our industry. I am not sure whether it is WTO compliant. But we have been told that it could be WTO compliant. But I think it is unilateral and arbitrary,” she said.

On being asked whether the it would impact the India-EU FTA talks, the minister said that she is not sure about it being escalated to the level of hurting the talks. “The FTA is an important component of wanting better trade relations but we will definitely raise our concerns,” she added.

On EU’s deforestation regulations, Sitharaman said that it could cause major disruptions in global supply chains, adding to the financial burden of meeting climate goals.

Expressing confidence on India’s net-zero goals, the minister said that country is heavily investing in in battery storage, ultra-supercritical thermal units, and modular nuclear energy programs.

“Research is being conducted in areas like small nuclear reactors and pumped hydroelectric storage, which show promise for further advancing India’s green transition,” she added.

When asked about India's position relative to larger economies like China, the speaker acknowledges that India cannot match China's spending but focuses on developing indigenous capabilities in electric vehicles (EVs).