Reuters has reported that the Indian government is planning to submit a complaint to the World Trade Organisation regarding the European Union’s Carbon Border Adjustment Mechanism.

The CBAM, which is due to come into full force at the beginning of 2026, would impose tariffs of between 20-35% on imports of carbon-intense goods such as steel, other metals, glass, cement, fertilisers and hydrogen to protect domestic European industries which are subject to the EU Emissions Trading Scheme, which applies a price to carbon dioxide.

Last month, the European Parliament approved with a large majority the plan to institute the CBAM, along with other initiatives such as including the shipping industry into the EU ETS by 2024 and the phasing out of free permits to domestic factories by 2034.

India will reportedly argue its case to the WTO on the basis that it is already following protocols pledged under the Paris Agreement on climate change. Official statements from the Indian government have not yet been forthcoming, but Ajay Sahai, director general of the Federation of Indian Export Organisations, has said that sectors “like steel and small manufacturers need more time to meet EU guidelines”.

India is unlikely to be the only country that raises objections to the CBAM, though at the same time, other developed countries may implement similar trade protections. The next few years will be a strong test of open trade principles and agreements against decarbonisation mechanisms.