U.S. launches Section 301 investigations against India over excess capacity and forced labour
The U.S. government has initiated two Section 301 investigations against India and other countries, citing "unreasonable or discriminatory practices" that burden U.S. commerce. The first probe examines whether countries are using excess manufacturing capacity to export goods to the U.S., harming American businesses. The second investigation focuses on whether countries have taken sufficient steps to prohibit imports of goods produced with forced labour. These investigations, launched under Section 301(b) of the Trade Act of 1974, could potentially lead to new tariffs on Indian imports, impacting sectors like textiles, health, construction, automotive, petrochemicals, and steel.
Key Points
- The U.S. has initiated two Section 301 investigations against India and other countries for trade practices deemed unfair.
- The first investigation targets alleged excess manufacturing capacity in sectors like solar modules, textiles, and automotive, leading to exports that harm U.S. businesses.
- The second investigation scrutinizes efforts to combat forced labour in supply chains and its impact on U.S. workers.
- These investigations, under Section 301(b) of the Trade Act of 1974, could result in new tariffs on Indian imports.
- Indian industries, particularly steel, aluminium, auto components, and textiles, face uncertainty due to these trade actions.
Exam Facts
- The investigations are launched under Section 301(b) of the Trade Act of 1974.
- The U.S. Supreme Court ruled against President Trump's use of the International Emergency Economic Powers Act (IEEPA) for reciprocal tariffs on February 20.
- India had a bilateral trade surplus of $58 billion with the U.S. in 2025, according to USTR, though Indian data shows $42.2 billion.
- India's solar module manufacturing capacity is nearly triple its annual domestic demand.
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