The U.S. argues that India possesses structural excess capacity across a range of industries, including solar panels, petrochemicals, steel, and textiles, and that this contributes to trade imbalances. Washington claims its trade deficit with India will reach $42 billion in 2025.
Commenting on the issue, India’s Deputy Trade Minister Amitabh Kumar said that the country’s steel and textile industries should be assessed in the context of its population size, domestic demand, and economic growth requirements. He emphasized that measuring production capacity solely through absolute figures can lead to misleading conclusions.
“Excess capacity is a matter of perspective. We do not believe we have excess capacity in any sector,” Kumar said, rejecting U.S. concerns regarding India’s steel industry.
Kumar added that steel production in India reflects the country’s development needs and noted that per capita steel consumption remains among the lowest in the world. He argued that, despite being the world’s second-largest steel producer, India’s current production levels remain insufficient when compared with its population size and economic growth objectives.
As differences over trade policies continue between the United States and India, the debate over excess capacity is expected to remain a key issue in bilateral trade relations in the coming period.
Source: Reuters
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