The commerce ministry on Friday dispelled reports stating that discussions on bilateral trade agreement between India and United States are on hold, and said both sides engaged in discussions for a mutually beneficial bilateral trade agreement.
"We have noted a media report regarding ongoing trade talks with US. It is denied that there is any hold off in bilateral engagement. It is reiterated that the two sides remain engaged for a mutually beneficial trade agreement," the commerce ministry said in a statement.
The remarks came after the United States Trade Representative (USTR) on March 11 launched a fresh round of Section 301 trade investigations targeting policies and industrial practices of 16 economies, including India and China.
Following a decision of the US Supreme Court striking down sweeping tariffs of the US administration, President Donald Trump has announced 10% tariffs on all countries for 150 days from February 24.
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Stung by the SC's ruling that invalidated most of the reciprocal tariffs, the Trump administration on Thursday initiated a formal probe into India and 15 other major trade partners for alleged unfair practices.
The United States Trade Representative has initiated investigations under Section 301 of the Trade Act of 1974 regarding the acts, policies, and practices of certain economies relating to structural excess capacity and production in certain manufacturing sectors, according to a notification.
"Key trading partners have developed production capacity untethered from the incentives of domestic and global demand. This excess capacity leads to, among others, overproduction and large or persistent trade surpluses, as well as underutilized and unused capacity, in manufacturing sectors," it said.
The USTR said it has evidence of "structural excess capacity and production" in India, while highlighting the $58 billion bilateral trade surplus it had with the world's largest economy last year. The agency noted India's global goods trade surplus sectors include textiles, health, construction goods, and automotive
goods.
"... evidence suggests the solar module sector is plagued by excess capacity, including that India's current module manufacturing is nearly triple annual domestic demand. India also has created significant excess capacity in petrochemicals, steel, and other industries," the agency said.
Washington and New Delhi agreed on a trade deal early February that will slash US tariffs on many Indian goods to 18% from 50%. However, the US Supreme Court later struck down the duties imposed under emergency powers last year, halting trade negotiations. Trump has since imposed a new 15% global tariff on most imported goods.
The other countries that the USTR will probe are China, the European Union (EU), Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, and Japan.
After public hearings and consultations, it will mull whether to take tariff and non-tariff actions.
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