India does not have excess production of steel or of textiles, and its capacities should be assessed in context to population size, domestic demand and economic growth, and it rejects such allegations by the US trade department, an Indian government official said on Friday, June 12.
The US Trade Representative investigations under Section 301 claim India has excess capacity in a range of industries ranging from steel, textiles to solar modules, contributing to India’s trade surplus of $42 billion in 2025.
Steel production volumes should be assessed in light of population size, domestic demand and growth needs and also seen against the backdrop of per capita consumption, and current steel production volumes are to meet the country development needs, additional secretary for trade Amitabh Kumar said.
“Excess capacity is a matter of perspective. We do not believe we have excess capacity in any sector,” he said, rejecting US concerns regarding the Indian steel industry.
He stated that, despite India being the second-largest steel producer in the world, its current production level remain insufficient as the country’s per capita consumption of steel is among the lowest in the world.
According to government officials not willing to be identified, the US is using Section 301 investigations on alleged excess capacity and forced labour issues to press India to open up its markets for agricultural products and energy.
India has been seeking a trade deal with US including preferential tariffs but a formal agreement has hit the roadblocks of US investigations.
The US Trade Representative in March launched investigations on India and 16 other countries over subsidies, state financial aid, forced labour, and letting factories maintain production even when market conditions do not support such production.