India Reserves Third-Party Rights in Russia's WTO Case Against the EU's Carbon Border Tax (CBAM)
On 25 September 2026, the Dispute Settlement Body (DSB) of the World Trade Organization (WTO) set up a panel (a group of trade judges) to examine Russia's complaint against the European Union's Carbon Border Adjustment Mechanism (CBAM). The case is numbered DS639.
India was one of 18 WTO members that reserved third-party rights in the case. This means India will not be a complainant, but it can read the main submissions and give its own views to the panel.
The other members include Argentina, Brazil, Canada, China, Chinese Taipei, Indonesia, Japan, Saudi Arabia, South Korea, Malaysia, Norway, Paraguay, Singapore, Switzerland, Thailand, the United Kingdom and the United States.
Russia started the dispute on 12 May 2025. The EU blocked Russia's first panel request at the DSB meeting of 24 July 2026. A panel is set up almost automatically when a complainant asks the second time, which is what happened now.
Russia argues that CBAM and the EU's Emissions Trading System (ETS) create unfair trade barriers and that the free carbon permits given to EU firms work like banned export subsidies. The EU says CBAM is a non-discriminatory climate measure that follows WTO rules.
India has raised concerns about CBAM with the EU, both at WTO bodies and in direct talks. India's main worries are the extra cost and paperwork for its exporters, especially small firms (MSMEs), and that CBAM ignores the climate principle of "common but differentiated responsibilities and respective capabilities".
Carbon Border Adjustment Mechanism (CBAM): The EU's Carbon Charge on Imports
CBAM is an EU rule that puts a price on the carbon pollution released while making certain goods outside the EU, when those goods enter the EU. EU factories already pay for their carbon under the EU's carbon market. CBAM makes importers pay a similar price, so foreign goods do not get a cost advantage just because their home country has weaker climate rules. The EU calls this preventing "carbon leakage".
Russia's case DS639 is the first formal WTO dispute against CBAM. By reserving third-party rights, India can argue against the CBAM costs faced by its steel and aluminium exporters without starting a case of its own.
WTO Dispute Settlement Mechanism
The WTO dispute settlement mechanism is the system that settles trade fights between WTO members. A country that feels another member's trade rule breaks WTO agreements first asks for talks (consultations). If talks fail, a panel of independent experts studies the case and gives a ruling, which can then be appealed. The rules are set out in the Dispute Settlement Understanding (DSU).
The DSB set up the DS639 panel on Russia's second request, and India used its DSU Article 10 right to join as a third party along with 17 other members.
Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC)
Common but Differentiated Responsibilities and Respective Capabilities, or CBDR-RC, is a basic principle of global climate law. It says that all countries share the duty to protect the Earth's climate, but not all countries must do the same amount. Rich countries polluted the most in the past and have more money and technology, so they should do more and help poorer countries. Developing countries like India must also act, but in line with their own situation and capacity.
India's objection to CBAM rests on CBDR-RC. India argues that a carbon charge set by the EU and applied equally to goods from poorer countries ignores their lower past emissions and capacity. Joining Russia's WTO case as a third party lets India make this point in a trade forum as well as in climate talks.
- WTO dispute number: DS639 (Russia vs European Union and its member States)
- Russia's request for consultations: 12 May 2025
- First panel request blocked by the EU: DSB meeting of 24 July 2026
- Panel established: 25 September 2026, on Russia's second request
- Members reserving third-party rights: 18, including India, China, the United States, the United Kingdom, Japan and Brazil
- Deadline to join as a third party: within 10 days of the panel being set up (DSU Article 10)
- CBAM definitive phase: from 1 January 2026; certificate sales from February 2027
- CBAM sectors: 6 (iron and steel, aluminium, cement, fertilisers, electricity, hydrogen)
- CBAM small-importer exemption: 50 tonnes or less a year
- Free EU ETS permits for CBAM sectors fully phased out by 2034