India has joined a 15-country US-led initiative on "excess capacity". Here is what the term means and what the pact does.

Industrial overcapacity happens when factories can produce far more goods than markets can absorb at sustainable prices. This can push prices down and pressure producers in other countries.

Countries worry when excess production is sustained by subsidies and other non-market policies rather than fair competition. The US has pointed to sectors like autos, batteries, chemicals, semiconductors and solar.

The October 7 Joint Ministerial Statement signed by India and 14 other economies sets up sector-specific platforms to share information and coordinate responses. It announces no tariffs or quotas for now.

For India, the balancing act is delicate. It is cooperating on the issue while itself facing a US Section 301 probe into structural excess capacity.

Trade analysts say signing the statement should not be read as accepting the case against Indian manufacturing.