India has maintained that trade-related differences with the United States should be addressed through bilateral negotiations rather than unilateral actions, calling on the US Trade Representative (USTR) to reconsider its proposed 12.5% tariff. New Delhi argued that the Section 301 investigation into alleged forced labour contains inconsistencies.
Appearing at a public hearing, Brij Mohan Mishra, Joint Secretary in the Department of Commerce, conveyed India’s strong reservations over the USTR’s findings, highlighting the country’s constructive engagement on issues related to forced labour.
What did Department of Commerce say on USTR’s findings?
India also reaffirmed that eliminating forced labour is a constitutional commitment and an obligation it upholds under international law and established principles.
“India would like to highlight its concerns with the USTR’s report and findings against India,” he said.
The USTR has not satisfied the relevant legal standards under Section 301(d) of the Trade Act. A mere absence of a forced labour import prohibition without evidentiary basis of other statutory requirements cannot be construed as unreasonable under Section 301, he added.
The USTR determination does not provide a rationale for countrywide tariffs and impermissibly clubs 46 economies (including India) into a single category, according to the written transcript of the hearing, held on July 8 and published on the USTR website.
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The USTR’s Section 301 investigation focuses on whether countries have failed to prohibit and effectively prevent the import of goods produced using forced labour.
India argued that the methodology adopted in the investigation is fundamentally flawed, contending that the findings are based on case studies involving only a limited number of economies while drawing broader conclusions from overall trade patterns.
According to India, the report relies on aggregate trade data and assumes that goods imported into an economy and flagged for potential links to forced labour are subsequently exported to the United States, without presenting sector-specific or country-specific evidence or establishing direct links to forced labour.
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In relation to India, there is inadequate and insufficient evidence that lack of forced labour import ban causes an unfair competitive advantage to the detriment of the American industry, he said.
“In conclusion, it is submitted that the USTR reconsider the imposition of tariff in light of the identified inconsistencies in the report in the Federal Register notice. We ask any trade problems be addressed within the framework of the India-US bilateral trade negotiation, not through unilateral measures such as this investigation,” he added.
India remains willing to engage constructively with the USTR through consultation and dialogue on any specific concern.
‘The present investigation against India may be rescinded without prejudice’
Making submissions on behalf of Agricultural and Processed Food Products Export Development Authority (APEDA), Shreyans Gupta, First Secretary in the Embassy of India in Washington, DC, said that the export promotion body objects to the USTR’s observations on the import of rice allegedly made with forced labour into India and the alleged impact on such imports in distorting the competitive conditions for the export and domestic sale of rice produced in the US.
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It is important to note that India’s imports of rice are very small and that caters to targeted demands of specific and niche rice varieties.
Gupta said that the overall value of rice imported into India in relation to the value of rice exported from India to the US is not even 3%.
He added that there are regulatory checks in place that prevent exports from India of imported rice that have been produced with forced labour.
Export of rice from India to the US is allowed only from the rice mills and processing units registered with the agriculture ministry.
“For these reasons, the present investigation against India may be rescinded without prejudice,” Gupta said requesting exemption for Indian rice from the proposed duty if the proceedings continue.
Industry chamber Ficci has submitted that the proposed additional tariff deserves careful reconsideration.
“An additional tariff will increase costs not only for Indian exporters, but also for US manufacturers, importers, retailers, and ultimately, American consumers,” the chamber said adding higher tariffs will raise costs for businesses that already follow compliance standards.
It urges that the proposed additional tariffs be reconsidered in light of India’s legal and regulatory safeguards, the extensive compliance mechanisms adopted by Indian industry, and the potential implications for legitimate trade and resilient US-India supply chains.
CII too has submitted that the proposed 12.5% additional tariff is neither supported in the evidence presented, nor likely to advance the stated policy goal.
The USTR report does not establish that India’s policy framework burdens US commerce, the chamber mentioned.
The USTR initiated two separate Section 301 investigations on March 11 and 12, 2026, examining 60 economies over concerns related to forced labour and excess industrial capacity.
On June 3, it released the findings of its forced labour probe and proposed additional tariffs on imports from the economies under review.
Under the proposal, imports from Canada, Ecuador, the European Union, Indonesia, Mexico and Pakistan would face a 10 per cent tariff, while goods from 54 other economies, including India and China, would be subject to a proposed 12.5% tariff.
The proposed duties have not yet been finalised. The USTR is expected to review public comments and testimony before making a final decision on the tariff plan.
