New Delhi: India on Wednesday rejected allegations by the US Trade Representative in its Section 301 probe on excess structural capacity and production involving several countries, including India in petrochemicals, textiles and other sectors.
On its $42 billion bilateral trade surplus with the US in 2025, New Delhi said a bilateral trade surplus between two countries is a “macroeconomic phenomenon which is a product of a concatenation of circumstances” including the role of certain non-market economies. India, which has a “significantly smaller trade share with the US in comparison to the other trading partners, cannot be attributed to playing a role in widening the US trade deficit” India said in its submission.
“More crucially, the USTR’s selective focus on specific sectors in which India happens to have a global trade surplus does not automatically establish that India has “structural excess capacity” in some of the indicated sectors,” it said.
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The notice, it said, provides no cogent rationale or prima facie evidence to substantiate its allegation that India has structural excess capacity in its major industries, leading to a trade surplus with the US.
India submits that the present investigation does not satisfy the requirements for the initiation of this investigation pursuant to Sections 301 and 302 of the Trade Act of 1974.In a separate response to another investigation launched by the USTR on March 12 against India and others on failure to take action on forced labour, India has submited that the probe does not satisfy the legal requirements for the initiation. “India requests the USTR to make a negative determination and terminate the investigation against India,” it said.
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That the Initiation Notice assumes that forced labor results in an automatic competitive advantage to Indian exporters to the detriment of the US industry and workers. Therefore, there is no evidence to suggest that India’s exports to the United States in this sector also confer any artificial advantage or burden or restrict US commerce.
In both cases, India requests that the USTR issue a negative determination with respect to India and terminate the investigation against it.