The 15-country grouping will focus on automobiles, batteries, chemicals, semiconductors and solar panels, as India faces scrutiny under a US Section 301 investigation.
India has joined a US-led initiative involving 15 countries to address structural excess manufacturing capacity across key sectors, including automobiles, batteries, solar panels, chemicals and semiconductors. The move comes as India’s own manufacturing policies face scrutiny under a US Section 301 investigation into the same issue.
The initiative raises questions about how New Delhi will balance international cooperation with its domestic manufacturing ambitions. India has maintained that its manufacturing capacity is intended to meet both domestic and global demand.
15-Country Grouping Targets Market Distortions
India was among the 14 economies that joined the United States in signing a Joint Ministerial Statement on October 7, following discussions at the G20 Trade Ministers’ meeting in Milwaukee on September 30–October 1.
The other signatories include the European Union, Japan, South Korea, Mexico, Argentina, Australia, Canada, France, Germany, Poland, Türkiye and the United Kingdom.
India, the European Union, Japan, South Korea and Mexico are also subjects of the US Section 301 investigation into structural excess capacity.
The joint statement called on countries to end non-market policies and practices that distort markets and contribute to structural excess capacity. It also emphasized cooperation, information sharing and complementary action to address the resulting challenges.
“We note that in the absence of such steps, an increasing number of countries are taking action to defend their industries, workers, and economies from distortions resulting from such policies and practices…such individual efforts will be more effective if concerned countries cooperate, share information, and take complementary action, wherever possible,” the statement highlighted.
Automobiles, Batteries and Semiconductors in Focus
The initiative will initially focus on automobiles and electric vehicles, batteries, chemicals, foundational semiconductors and solar panels.
According to the statement, the signatories will establish dedicated sectoral platforms to exchange information and explore coordinated measures to address the effects of excess capacity on domestic industries, workers and supply chains.
India Faces Questions Over Manufacturing Policy
The Trade policy think tank Global Trade Research Initiative (GTRI) said India was joining Washington in addressing an issue that is also under scrutiny in its own manufacturing sector. The United States launched its Section 301 investigation into structural excess capacity across 16 economies in March.
“The initiative also exposes a question of consistency: participating economies are coordinating against market distortions without confronting the US over its own trade-rule violations during the past two years,” GTRI founder Ajay Srivastava said.
Srivastava added that India would need to assess whether the cooperation protects domestic manufacturing or gives Washington greater legitimacy to challenge India’s industrial expansion.
“Signing the declaration should not amount to accepting the case against Indian manufacturing,” he said.
US Says Initiative Will Address Excess Production
US Trade Representative Jamieson Greer said on Wednesday that the initiative aims to address production exceeding global demand when sustained by government policies and interventions.
“Over the course of the US G20 presidency, numerous economies raised instances of structural excess capacity and production in economies that persistently exceeded global demand and were sustained by foreign government’s non-market policies and practices..Left unchecked, these issues will continue to cripple domestic industries, displace local production, and hinder our ability to raise the standard of living for workers and their families,” he said.
No Tariffs or Quotas Announced
The initiative has not yet announced specific tariffs, quotas or other trade restrictions.
Senior officials have begun work on the initiative and are expected to meet at the technical level before December. Their tasks include developing terms of reference, sharing non-confidential information and data, assessing the impact of excess capacity and identifying information gaps.
The signatories have also invited other countries that are not members of the Organisation for Economic Co-operation and Development (OECD) to join the initiative.