Mumbai, Jan. 27 -- India's landmark trade treaty with the European Union (EU) does not resolve the question over its contentious carbon tax, but a promised preferential treatment could open up export opportunities for domestic steelmakers in future.

The EU plans to levy a surcharge on imports in highly polluting industries like steel, aluminium, cement, and fertilizers under its Carbon Border Adjustment Mechanism (CBAM). Steel and aluminium are the only sectors within the CBAM's purview with significant exports from India to Europe. While the scheme is in force from January, levies will begin only later in 2026.

The two sides will set up technical dialogue to explore preferential access for Indian manufacturers to the European market un...