New Delhi, Feb. 28 -- India should incorporate protective provisions in its proposed free trade agreement (FTA) with the European Union to safeguard its interests against the EU's carbon tax, according to recommendations from think tank Global Trade Research Initiative (GTRI) on Thursday.

The EU has established the Carbon Border Adjustment Mechanism (CBAM), commonly referred to as a carbon tax, which will take effect from January 1, 2026.

This mechanism will primarily impact seven carbon-intensive sectors, including steel, cement, fertiliser, aluminium, and hydrocarbon products.

GTRI warned that without protective language in the agreement, post-FTA, EU goods would enter India duty-free, while Indian steel and aluminium exports to the ...