China barred its airlines from participating in the European scheme, which is meant to reduce emissions, in February.
The Indian official, with direct knowledge of talks between the EU and other countries on the issue, said India will soon ask local airlines not to share emissions data with the bloc or buy any carbon credits.
If the EU retaliates by suspending Indian airlines from flying to Europe, India would make similar moves and consider charging an “unreasonable” amount for flying over India, the official said yesterday.
“The questions is, are you provoking the world into a trade war?” the official said.
India could also follow in China’s footsteps by cancelling orders for Airbus planes in protest at the European taxes, he added.