UK recognises India's CCTS; carbon price to be accepted under CBAM regime: Comm Secy

Mumbai, The UK has recognised India's Carbon Credit Trading Scheme (CCTS) and agreed that the carbon price paid under this programme will also be recognised under the British CBAM regime, according to Commerce Secretary Rajesh Agarwal on Wednesday.

"That's a good development because this is something that India has been talking about for months and years now wherein we have been saying that if a company has paid for a carbon footprint in one economy from where it is originating, then it should not be asked to pay the same tax in the destination economy," he told reporters here.

The UK has recognised India's CCTA as a qualifying criterion for carbon pricing relief under its carbon border adjustment mechanism (CBAM), a move that could reduce the double taxation burden on domestic exporters.


"...on the UK-India discussions around CBAM, it's a very good development wherein the UK has understood our CCTS system and has agreed that whatever levy or the carbon price has to be paid under CCTS will be recognised under their regime also," Agarwal added.

With this recognition, UK importers of eligible Indian goods covered under CBAM will be able to seek carbon price relief corresponding to the effective carbon price borne by those goods under the CCTS, subject to satisfying the evidence and verification requirements prescribed under UK law.

This will reduce the effective CBAM liability on Indian goods, directly benefiting Indian exporters to the UK.

FREIGHT COST INCREASE FOR INDIAN EXPORTERS:

On this issue, Agarwal said that the Commerce Ministry is working with the exporters.

"Our first objective is to see that they have enough access to ships and containers so that their cargo is not stuck. Then the second option is to create how much we can ensure that their costs are competitive and the cargo times are minimal," he said.

He added that if the freight cost increase is for all the countries, these costs are passed on to the end consumers.

"...but I think the trade has been growing after that also. And in the first four months, we have grown by more than 15 per cent as far as our exports are concerned. So, that means that the impact of freight has not been as much as we had anticipated," the secretary said.

On the issue of vessels' schedule, he said the ministry is working on that.

"Some other vessels in between were not stopping at other ports. But we have worked around it and ensured that there are other vessels that stop, and we are able to create space and export cargo so that our exporters are not stuck. They are going as per schedule," he said.

During April-July this fiscal, India's merchandise exports jumped 17.04 per cent to USD 173.78 billion, and imports climbed 19.27 per cent to USD 292.38 billion.

The US-Iran war has disrupted the movement of ships through the Strait of Hormuz, leading to higher freight costs and concerns over container availability.