New Delhi, Jan. 31 -- The Economic Survey 2024-25 has raised concerns about the European Union's Carbon Border Adjustment Mechanism (CBAM), calling it a restrictive trade policy that could threaten India's exports and widen the current account deficit.

Released by finance minister Nirmala Sitharaman in Parliament on Friday, the survey noted that while the EU has positioned CBAM as an environmental safeguard against carbon leakage, the so-called 'carbon tax' posed significant risks to India's trade prospects.

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The timing of the observation is crucial, as India is engaged in negotiations for a free trade agreement with the EU, one of its key trade partners. The 10th round of talks is...