No Overcapacity in Textiles, Steel Sectors in India: DGTR

• Amitabh Kumar said India does not think it has overcapacity in textiles because domestic consumption is still very low.

• He also said India’s per capita steel consumption is among the lowest, despite the country being a major producer.

• The comments come as the US Trade Representative is probing several economies, including India, over alleged structural excess capacity.

India does not have surplus capacity in textiles and steel sectors, as per capita consumption of these products in the country remains among the lowest in the world, a senior government official said on Wednesday.

The remarks assume significance as the Office of the United States Trade Representative (USTR) in March launched a probe regarding the acts, policies, and practices of various economies, including India, under Section 301(b) of the Trade Act of 1974, relating to structural excess capacity and production in manufacturing sectors.

Director General of Trade Remedies and Additional Secretary in the commerce ministry Amitabh Kumar said that overcapacity has not come under any of the trade remedial laws in the WTO (World Trade Organization) framework and it is a new narrative.

"We do not think we have overcapacity in the textiles sector. Our per capita consumption of all kinds of textile products is abysmal, particularly in manmade fiber and technical textiles. Ours is a hot, tropical climate; we wear cotton. How do we have overcapacity? "In steel also, our per capita consumption is so low. We have one of the lowest; we may be the second largest producer of steel, but compared to our population, our economic and growth imperative, it's one of the lowest," he told reporters here.

India is a net importer of manmade fibers, besides cotton.

In its submission, India has rejected the allegations, and has stated that the USTR notice has not provided cogent rationale or prima facie evidence to substantiate its allegation that India has structural excess capacity in its major industries, leading to a trade surplus with the US.

Kumar said that trade remedy measures play an important role in addressing unfair trade practices, strengthening domestic manufacturing and supporting a rules-based international trading system.