Goyal rejects claims of India’s excess capacity

Commerce Minister Piyush Goyal affirmed during the G20 Trade Ministers Meeting in Milwaukee that India does not possess structural excess manufacturing capacity in the sectors under the G20 Presidency's focus. He clarified that industrial capacity by itself does not pose a problem; rather, distortions can emerge if production is geographically concentrated due to hidden subsidies and support.

Goyal underscored that diversification of production and supply chains is a permissible goal, but it cannot serve as a rationale for measures beyond World Trade Organisation (WTO) rules or for transferring adjustment burdens onto developing nations, which must preserve policy space for industrialization.

India's manufacturing capacity aligns with both domestic and global requirements, Goyal stated. Concerning the US Trade Representative's (USTR) recent Section 301 investigations targeting 60 economies regarding forced labor and excess industrial capacity, India aligns with the global concern about trade-distorting support leading to dumping and predatory pricing.

It addresses these issues via evidence-based WTO measures, including anti-dumping and countervailing duties, confirmed by the WTO, which allows for judicial review.

Goyal further stressed that India is the fastest-growing large economy globally, with a domestic-demand-driven economy catering to 1.4 billion people. The country is constructing manufacturing value chains from design to finished goods, serving as a reliable link in global supply chains. On the topic of ending forced labor in global supply chains, Goyal emphasized India's absolute and unconditional commitment to eliminating forced labor.

He stated that border measures should be based on specific and verifiable evidence, not presumptions about entire countries, regions, or sectors, and must respect due process and WTO rules. International Labour Organization (ILO) is the universal and tripartite body responsible for labor standards, he added.

Regarding the Most-Favoured-Nation principle, Goyal underscored India's reliance on a transparent, non-discriminatory, and rules-based trading system. This principle ensures that the same terms apply to all traders, regardless of size. He stressed that consensus remains central to the WTO, and special and differential treatment is crucial for enabling developing countries to catch up with developed economies. Goyal also advocated for the restoration of the two-tier dispute settlement system.