India refutes US Section 301 probe claims on excess capacity in steel, textiles
New Delhi, June 10
India has refuted claims made by the Trump administration under a US Section 301 trade investigation that there is excess production capacity in the Indian textile and steel sectors which is being used to export goods at low prices.
Additional Secretary, Ministry of Commerce, Amitabh Kumar on Wednesday said that India does not have surplus manufacturing capacity in either industry, denying allegations being examined under the US Trade Representative's (USTR) Section 301 investigation.
Kumar highlighted that India's production levels in textiles and steel need to be contextualised considering the country's large population and growing consumption requirements.
He said that on a per capita basis, both production and consumption remain well below levels seen in several developed economies, he remarked. Though, he added that new measures are being mulled for the steel sector.
A US Section 301 trade investigation is an official inquiry conducted by the Office of the United States Trade Representative (USTR) under Section 301 of the Trade Act of 1974. Its purpose is to determine if foreign government policies or practices are unreasonable, discriminatory, or violate international trade agreements, thereby burdening or restricting American commerce.
India and the United States are expected to finalise their long-awaited trade agreement only after the conclusion of the ongoing Section 301 investigation, according to sources familiar with the matter.
Sources said New Delhi is seeking assurances that no additional tariffs will be imposed once the bilateral trade agreement is concluded, as negotiators work to provide greater predictability for businesses and investors.
The timing is significant as the 10 per cent tariff regime that the US has temporarily put in place is set to expire on July 24. Following its lapse, basic Most Favoured Nation (MFN) tariff rates are expected to come into effect, according to officials.
India is also pressing for more favourable tariff treatment compared with competing manufacturing economies, aiming to strengthen its position as a global production and export hub.
— IANS
Reader Comments
As someone who works in international trade, I find this quite interesting. India does have legitimate reasons to argue against the excess capacity claims - per capita consumption in steel and textiles is indeed much lower than in developed nations. However, we should also be transparent about any subsidies that might be distorting the market. It's a delicate balance.
The US always tries to impose trade restrictions on developing countries. First it was China, now it's India. Our steel industry has been through a lot in recent years, and we are still recovering. These investigations just create unnecessary uncertainty for our exporters. India should consider reciprocal measures if the US doesn't back down.
It's good that our government is refuting these claims, but we must also introspect. Are we truly competitive in steel and textiles? The global market needs quality and innovation, not just low prices. We should focus on adding value to our exports rather than relying on volume. The US investigation might be a wake-up call for our industries to modernise.
I'm an American businessman who has worked with Indian textile suppliers for over a decade. The quality of Indian textiles is generally good, but there have been instances of dumping in the past. India needs to provide more data transparency to the USTR to prove its case. Otherwise, the Section 301 tariffs will hurt both Indian exporters and American consumers who rely on affordable Indian goods.
The per capita argument makes perfect sense! India's steel consumption per person is around 75 kg compared to 500+ kg in developed countries. How can they call this excess capacity? This is just protectionism disguised as trade investigation.
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