The International Air Transport Association (IATA) expects India to lead global talks on the European Union's Emissions Trading Scheme (ETS).
Two Indian airlines failed to meet a March 31 deadline to comply with the ETS, which requires carriers flying to or from Europe to offset their carbon emissions, but has prompted an outcry from some in the industry.
"Introducing a divisive regional ETS risks a trade war that nobody can afford," Tony Tyler, director general of the IATA told a news conference in New Delhi.
"India does not appear to be philosophically against the EU ETS. The objection India has is that it is an attempt to wield the EU's territorial rights. A lot of countries are also of that view. That position is very reasonable."
The two Indian airlines joined eight Chinese carriers to deliver on threats not to comply with the ETS. More than 1,200 airlines, including U.S. carriers, have met the requirements.
Opponents of the law accuse the European Union of imposing an extra-territorial tax and say it sets a dangerous precedent.
"The problem with the EU ETS is that it is regional and not a global scheme that everybody agress to," said Tyler. "We expect that the objectionable elements of the scheme will be withdrawn."
Tyler added that he believed India had no objection to working towards a non-regional solution to managing the aviation industry's 2 per cent contribution to global man-made CO2 emissions.
More than 20 nations opposed to the ETS have grouped together in a "coalition of the unwilling". They last met in Moscow in February, when they agreed possible retaliatory measures and said they would meet again in Saudi Arabia, although a date has not been confirmed.
The European Commission has previously said it introduced a carbon cost for all flights, because more than a decade of talks at the United Nations' International Civil Aviation Organization (ICAO) had failed to agree on a way to curb the sector's rising emissions.