NEW DELHI: With the Trump administration invoking Section 301 of the Trade Act against major economies, including India, the government will take a wait and watch stance till the US prepares the final report, said an official source in the know.
Through 301, the US is trying to offset revenue loss after its Supreme Court struck down Trump’s global tariffs. In India, the probe triggered uncertainty among exporters in manufacturing sectors like steel, electrical goods, textile etc.
The Office of the United States Trade Representative (USTR) initiated a probe into manufacturing practices in several economies, including India, under Section 301 of the Trade Act of 1974, citing concerns over structural excess capacity. The investigation will assess whether such policies distort markets or restrict US commerce by driving overproduction, trade surpluses and underutilised industrial capacity across key sectors.
“India is adopting a wait-and-watch stance on the Section 301 investigation by the USTR. New Delhi will evaluate the report once released before deciding on any next steps,” said the government official.
A Section 301 trade probe allows the office of USTR to examine and potentially punish (by imposing higher tariffs) foreign trade practices deemed unfair, discriminatory, or restrictive to US commerce.
“Evidence suggests the solar module sector is plagued by excess capacity, including that India’s current module manufacturing is nearly triple the annual domestic demand. India also has created significant excess capacity in petrochemicals, steel, and other industries,” stated USTR.
Confederation of Indian Textile Industry (CITI) sought government intervention to safeguard the interests of the textiles and apparel sector, as the USTR announcement brings more uncertainty.
According to steel exporters, with many duties like anti-dumping duty already in place, the sector is grappling with multiple challenges.