Structural Excess Capacity: India joins US-led group on structural excess capacity
NEW DELHI: India has joined US and a dozen other economies, including Canada, EU, Japan, South Korea, Mexico, France, Germany and UK, on structural excess capacity in five categories – autos and EVs, batteries, chemicals, foundational semiconductors and solar panels – which are globally dominated by China.The coalition will coordinate sectoral action and comes days after a meeting of trade ministers from G20 countries with the US taking a lead on the subject during its presidency of the grouping. Separately, the US trade representative is probing several countries, including India, for structural excess capacity under Section 301. The development is also significant as it comes weeks after US President Donald Trump met his Chinese counterpart Xi Jinping.“We are concerned that, absent timely and effective actions, structural excess capacity and production in these sectors will cripple our domestic industries, displace local production, destroy jobs, undermine our economies, hinder efforts to develop and industrialise, and ultimately lower the standard of living for our people,” a joint statement said.The countries have sought an end to the use of non-market policies and practices that distort markets and contribute to the problem. China has for long been blamed by countries across the world for offering subsidies and dumping goods. The statement also noted that countries are taking individual action and the new group will work together “in new, dedicated sectoral platforms to further examine and take effective actions that address structural excess capacity and production in key sectors of concern”.“We are committed to meeting before Dec 2026, at the technical level, to develop terms of reference; share non-confidential information and data on structural excess capacity and production, its impact on these sectors, and efforts to mitigate the damage; and identify information gaps, drawing upon work of the OECD and other sources as appropriate. We commit to exploring effective and, whenever possible, complementary actions to defend our economies from the negative impact on trade and workers created by structural excess capacity and production. Working together, we aim to create the conditions necessary so that market-oriented competition in affected sectors can thrive once again,” the statement said.In 2016, in Shanghai, G20 trade ministers released a statement expressing concern about excess capacity in certain industries and its negative impacts on trade and workers, and a few months later, it was also endorsed by leaders from these countries at Hangzhou.
