India Rejects G20 Claims of Excess Manufacturing Capacity

Commerce and Industry Minister Piyush Goyal told the G20 Trade Ministers’ Meeting in Milwaukee that India does not have structural excess manufacturing capacity in the sectors highlighted by the G20 Presidency, which the United States will hold in 2026. He said the country’s capacity meets both domestic demand and global supply‑chain needs, and that the issue is not overall capacity but distortions that can arise when production clusters are driven by hidden subsidies.

Goyal warned that while diversification of production and supply chains is a legitimate goal, it must not become a pretext for measures that breach World Trade Organization (WTO) rules or shift adjustment burdens onto developing nations. He reiterated India’s concern, shared by several G20 members, that trade‑distorting support in some economies leads to dumping and predatory pricing, and said India addresses such practices through evidence‑based WTO tools such as anti‑dumping and countervailing duties, which are subject to judicial review.

The United States Trade Representative launched two Section 301 investigations on March 11 and March 12, covering 60 economies over forced‑labour and excess‑capacity concerns. The forced‑labour probe has concluded, resulting in a 10 percent duty on imports from countries including India, while findings on the excess‑capacity probe are still pending. The USTR has flagged excess capacity in sectors ranging from steel and textiles to batteries, semiconductors and solar modules.

Goyal also emphasized India’s status as the fastest‑growing large economy, serving 1.4 billion people with a domestic‑demand‑driven model and building end‑to‑end manufacturing value chains. He called for a transparent, non‑discriminatory, rules‑based trading system, preservation of special and differential treatment for developing countries, and the restoration of the WTO’s two‑tier dispute‑settlement mechanism. What to watch: how India’s WTO‑based responses shape the pending USTR excess‑capacity investigation.

Editor's note: The draft misses a significant portion of the provided source text, including the full list of sectors flagged by the US and specific Indian stances on the ILO and MFN principle.