In response to the EU’s carbon border tax, India might impose retributive tariffs on the EU’s exports. The European Union wants to impose an extra tax on products brought into the EU as imports, such as iron, steel, and cement to encourage “cleaner industrial production in non-EU countries.”

This levy is called the Carbon Border Adjustment Mechanism. India is concerned about the tax because it will make the country’s steel exports more expensive.

The tax will be a significant challenge for India’s metal sector, notes Ajay Srivastava, founder of the Global Trade Research Initiative. Watch this video to know more.