"Industrial capacity is not the problem; hidden subsidies are." Examine India's position on 'structural excess capacity' at the G20 and the role of WTO-consistent trade remedies.

At the G20 Trade Ministers' Meeting in Milwaukee (US Presidency, 2026), India argued that the problem is not industrial capacity itself. Hidden subsidies that pile up production in a few places are what distort trade, and India said they must be fixed through WTO-consistent tools, not unilateral measures [1]. India's method is sound, but these tools have clear institutional limits.

India's Position on Structural Excess Capacity

• No excess capacity at home: India said it has none in the sectors the Presidency named. Its manufacturing serves a domestic-demand-driven economy of 1.4 billion people as well as global needs [1].
• The cause is subsidies, not scale: hidden subsidies and support lead to dumping and predatory pricing [1]. OECD data support this. Global steel excess capacity reached about 640 million tonnes in 2025, driven by rising subsidies in some major non-OECD producers [2].
• Fair sharing of the burden: diversifying supply chains is legitimate. It cannot be an excuse for non-WTO measures that push the cost of adjustment onto developing countries [1].
• Protecting the system: keep MFN, consensus and special and differential treatment. MFN gives the smallest and the largest trader the same terms [1].

Role of WTO-Consistent Trade Remedies

Strengths

• Targeted and evidence-based: anti-dumping and countervailing duties apply to specific subsidised imports after an investigation, and can be reviewed by courts [1].
• Non-discriminatory: unlike blanket unilateral tariffs, they do not hurt developing economies that do not subsidise.

Limitations

• No final court: the Appellate Body has not heard new appeals since December 2019. More than 20 panel rulings are stuck after being appealed "into the void" [3].
• Circumvention: the OECD warns that goods routed through other countries are weakening trade measures [2].
• Treats symptoms, not causes: remedies work case by case and do not stop the subsidies themselves.

India is right to separate productive capacity from market distortion and to prefer rules over unilateral action. It would be more credible if it also offered proposals:

• use interim appeal arbitration such as the MPIA of 24 members plus the EU [3];
• have DGTR investigate circumvention;
• put forward subsidy-transparency ideas in existing WTO bodies under the UK's 2027 Presidency [1].

A restored two-tier dispute settlement system remains the basis of the rules-based, non-discriminatory trading system that SDG 17 calls for.