Subsidy-driven overcapacity in some economies threatens the rules-based trading order. Examine India's position at the G20 and the adequacy of WTO trade remedies in addressing it.

Subsidy-driven overcapacity is production capacity that runs well ahead of demand and is kept alive by state support rather than market signals. The OECD projects global steel excess capacity of 745 million tonnes by 2028 [2]. Exporting that surplus through dumping weakens fair competition and the WTO system. India has backed WTO rules while also protecting its own industry in practical ways.

India's position at the G20 Trade Ministers' Meeting (Milwaukee, 2026)

• It shares the concern: India said trade-distorting support in some economies leads to dumping and predatory pricing [1].
• The problem is distortion, not capacity: India blamed hidden subsidies for concentrating production in a few places. It said India has no structural excess capacity in the sectors the G20 Presidency identified [1].
• It prefers multilateral remedies to unilateral ones: India backed anti-dumping and countervailing duties that rest on evidence and are subject to judicial review [1].
• It sees the issue through a development lens: India wants WTO decisions taken by consensus and wants developing countries to keep the policy space to industrialise [1].

Adequacy of WTO trade remedies

Strengths

• Legitimate and rules-based: The Anti-Dumping Agreement and the SCM (Subsidies and Countervailing Measures) Agreement let countries target unfair pricing or subsidies without breaking MFN (equal treatment of all trading partners).
• Quick relief through safeguards: India imposed a 12% safeguard duty on steel flat products in April 2025 when imports surged [4].

Limitations

• Subsidies are too large for case-by-case remedies: In 2024 the median Chinese steel firm got 15 times more subsidy, relative to its assets, than firms elsewhere [2]. Proving subsidies firm by firm is slow.
• Circumvention: China's semi-finished steel exports to Southeast Asia rose 300% in 2025. After processing there, the steel can get around duties aimed at one country [3].
• They treat the symptom, not the cause: Duties push the surplus to the next market. They do not shut down excess capacity.
• No final rulings: The Appellate Body has been non-functional since 2019, and India wants it restored [5]. A losing side can appeal "into the void", so disputes are never settled.
• Costs fall on domestic buyers: Duties raise input costs for downstream MSMEs that use steel.

WTO trade remedies are therefore necessary but not enough on their own. They give legal cover but cannot remove the subsidies that cause the overcapacity. India should:

• strengthen anti-circumvention probes by the DGTR (Directorate General of Trade Remedies);
• push for shared subsidy data through the GFSEC's joint-action framework [3];
• press to restore two-tier dispute settlement.

These steps would keep India's G20 stance credible and support SDG 17.10, a universal, rules-based and non-discriminatory multilateral trading system.