India has refuted claims made in a US trade probe under section 301 of the country maintaining excess production capacity in the textiles and steel sectors
Section 301 of the US Trade Act allows Washington to investigate and respond to foreign trade practices it considers discriminatory or unreasonable. The provision has previously been used in trade disputes involving China and other major trading partners.
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Additional Trade Secretary 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 probe.
Further, Kumar highlighted India's production levels in textiles and steel need to be contextualised considering the country's large population and growing consumption requirements.
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.
India-US Trade Deal Hangs In The Balance
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.
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Sources said New Delhi is seeking assurances that no additional tariffs will be imposed once the bilateral trade deal is concluded, as negotiators work to provide greater predictability for businesses and investors.
The timing is significant as the US' temporary 10% tariff regime is set to expire on July 24. Following its lapse, basic Most Favoured Nation (MFN) tariff rates are expected to come into effect, sources added.
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.
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