India has firmly pushed back against allegations from the United States regarding surplus manufacturing capacity in its textile and steel sectors. Amitabh Kumar, an official from India’s trade ministry, clarified that the country’s production levels should not be viewed through the lens of absolute output, but rather evaluated against the vast requirements of its growing population and domestic consumption. Kumar specifically pointed out that per-capita consumption of steel and textiles in India remains among the lowest in the world, making the narrative of an industrial surplus factually unfounded.

The dispute stems from a Section 301 investigation launched by the U.S. Trade Representative, which scrutinizes policies ranging from industrial subsidies to state financing. While the U.S. has hinted at potential tariffs, suggesting that these industries are creating an unfair trade imbalance, Indian officials argue that these measures are likely being used as leverage to gain broader market access for American agricultural, energy, and defense products. Despite these tensions, New Delhi remains engaged in ongoing negotiations, aiming to finalize a trade agreement that supports its development goals while addressing the concerns raised by the Biden administration.