India has pushed back against allegations being examined under a US trade investigation, rejecting claims that it maintains excess production capacity in the steel and textile sectors.
The response comes as the United States continues a probe under Section 301 of its Trade Act, a provision that allows Washington to investigate and act against foreign trade practices it considers discriminatory or unreasonable.
India says production levels match domestic needs
Per NDTV, Additional Trade Secretary Amitabh Kumar said India does not have surplus manufacturing capacity in either the steel or textile industry.
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According to Kumar, production figures should be viewed in the context of India's large population and growing domestic demand. He argued that both output and consumption levels remain relatively low when measured on a per-capita basis.
He noted that production and consumption in these sectors are still below levels seen in several developed economies. Kumar also indicated that the government is considering additional measures for the steel sector, although no specific details were provided.
What is the Section 301 probe?
Section 301 of the US Trade Act is a trade enforcement mechanism that enables the US government to investigate and respond to foreign trade policies it believes unfairly affect American interests.
The provision has been used in several major trade disputes in the past, including cases involving China and other key trading partners.
The ongoing investigation has become an important factor in broader trade discussions between India and the United States.
Trade deal linked to probe outcome
Sources cited by NDTV said India and the US are expected to conclude their long-awaited bilateral trade agreement only after the Section 301 investigation is completed.
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According to sources, New Delhi is seeking assurances that no additional tariffs will be imposed after the trade pact is finalised. Such guarantees are seen as important for providing certainty to businesses and investors.
The discussions come ahead of the expiry of the US' temporary 10% tariff regime on July 24. Sources said that once the arrangement ends, standard Most Favoured Nation (MFN) tariff rates are expected to come into effect.
India is also pushing for more favourable tariff treatment than competing manufacturing economies as it seeks to strengthen its position as a global manufacturing and export hub.
