India Inspects Legal Impact Of US Investigation Under Section 301 Of Trade Act Of 1974

Amid the ongoing United States investigations linked to structural excess capacity among trading partners, including India, Trade Secretary Rajesh Agrawal on Monday, March 16 noted that the South Asian country was examining the legal impact of this probe.

Further, he stated that India remains engaged with the U.S. side for a mutually beneficial trade agreement. 

This places the focus on several trade deals that the Trump administration has finalised, including its interim trade framework agreement with India.

After the SCOTUS invalidating Trump's Liberation Day tariffs, a 10% blanket tariff was imposed by the US government on its trading partners, which could surge to 15% in the near-term period.

In February, India and the US announced a trade deal framework under which the US cut tariffs on Indian exports to 18%. The Trump administration also removed the 25% levy with regards to Russian oil purchases contingent on India stopping procurement from Russia. However, India has not stopped buying Russian crude and has stepped up purchases amid the Middle East conflict as a result of the United States offered 30-day waiver on purchasing Kremlin oil and gas.

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USTR Initiates Probe Under Section 301

Under the Section 301 Of Trade Act Of 1974, the Office of the United States Trade Representative (USTR) is examining excess industrial capacity among 16 economies, including India.

This trade enforcement tool allows US to act against foreign policies it considers harmful to American commerce. It is expected to likely delay in inking the US-India trade pact, and renewed scrutiny of New Delhi's Industrial & trade policies.

Meanwhile, the inter-agency Section 301 Committee as part of this probe will seek public comments and hold hearings to gather views from stakeholders such as industry groups, trade experts, and companies.