India Joins US-Led Coalition Addressing Structural Excess Capacity in Key Sectors
NEW DELHI: India has aligned with the United States and 13 other economies, including Canada, the EU, Japan, South Korea, Mexico, France, Germany, and the UK, to address structural excess capacity in five key sectors: automobiles and electric vehicles, batteries, chemicals, foundational semiconductors, and solar panels. These sectors are predominantly influenced by China’s market practices. The coalition aims to coordinate sectoral actions following a recent meeting of G20 trade ministers, with the US taking a leading role during its presidency.
The US trade representative is currently investigating several nations, including India, for structural excess capacity under Section 301. This initiative follows a meeting between US President Donald Trump and Chinese President Xi Jinping, highlighting the urgency of the issue. A joint statement from the coalition expressed concerns that without timely intervention, excess capacity could severely impact domestic industries, displace local production, and ultimately lower living standards.
The participating countries have called for an end to non-market policies that distort markets and exacerbate the problem. China has faced criticism for its subsidies and dumping practices. The coalition plans to collaborate on dedicated sectoral platforms to further analyze and address these issues. They are committed to convening before December 2026 to develop terms of reference, share non-confidential data on structural excess capacity, and identify information gaps, leveraging resources from the OECD and other organizations.
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