India joined China on Thursday in asking their airlines to boycott the European Union's carbon scheme, confirming an earlier Reuters report and escalating a diplomatic row over the issue.
India's opposition to the Emission Trading Scheme (ETS) could damage the chances of the Free Trade Agreement (FTA) it is negotiating with the EU.
Though the European Union has directed Indian carriers to submit emission details of their aircraft by March 31, 2012, no Indian carrier is submitting them in view of the position of the government, India's civil aviation minister Ajit Singh said.
Hence the imposition of carbon tax does not arise, Singh told lawmakers in a written reply.
On Monday, a senior Indian government official told Reuters that India would ask local airlines not to buy carbon credits from or share emissions data with the bloc, raising the prospect of a global trade war.
The row is over a scheme which could levy charges for carbon emissions for flights in and out of Europe.
Any showdown with the EU will add to differences between India and the bloc over duties on cars and market access for software and services companies already in the way of the Free Trade Agreement.
It would probably be extremely difficult, if not impossible to get the FTA through the (European) parliament if India does this (ignored EU ETS aviation law), and India is in the last stage of this negotiation, said former European lawmaker Glyn Ford, who now works at Brussels-based consultancy GPlus
Foreign governments, including the world's top three carbon emitters, the United States, China and India, say the EU is exceeding its legal jurisdiction by charging for an entire flight, as opposed to just the part covering European airspace.
Singh said local airlines would not comply with a request by the EU to submit their emission details by March 31, and a basket of measures was available to the Indian government to counter the scheme.
In a meeting last month in Moscow of the so-called coalition of the unwilling, countries opposed to the EU law including India agreed on a basket of retaliatory measures.
China said in February its airlines were barred from participating in the EU Emissions Trading Scheme unless they got government approval. Beijing has also suspended the purchase of $14 billion (8 billion pounds) worth of jets from European maker Airbus.
Under the EU's Emissions Trading Scheme, no airlines will face a bill until next year after emissions have been calculated and even then they will be entitled to free allowances to cover 85 percent of carbon generated up to a benchmark level.
(Reporting by Anurag Kotoky, additional reporting by Barbara Lewis in BRUSSELS; Editing by John Chalmers, Mark Potter and Tony Munroe)