Indian Industry Urges US To Reconsider Proposed Tariffs Over Forced Labour Probe

Indian industry has urged the United States Trade Representative (USTR) to reconsider its proposal to impose additional tariffs on a wide range of Indian goods under Section 301 of the US Trade Act, arguing that the move lacks a strong evidentiary basis and could affect bilateral trade ties.

According to a report by The Economic Times, the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (Ficci) made separate submissions during the USTR’s public hearing on the ongoing investigation held from July 7 to July 9.

Both industry bodies argued that there is no credible evidence suggesting that Indian manufacturing or export supply chains are linked to forced labour practices.

They warned that imposing additional duties could undermine the resilience of India-US supply chains and increase costs for businesses and consumers.

CII urged the USTR not to impose any tariff or non-tariff measures against Indian industry, saying such action would be unjustified without clear proof of violations.

“There is no credible evidentiary basis linking Indian production to the use of forced labour inputs,” CII said in its submission.

Ficci also requested the US authorities to reconsider the proposed tariff measures, highlighting India’s existing legal framework, industry compliance systems and safeguards against labour exploitation.

The industry body argued that the absence of a specific law or mechanism cannot automatically imply that goods exported from India are produced using forced labour or that Indian supply chains carry higher risks.

Ficci also raised concerns over the impact of a broad-based tariff approach, stating that a uniform duty on all imports would fail to differentiate between supply chains that may require closer monitoring and those that already follow established compliance standards.

The industry bodies suggested that concerns related to labour practices should be addressed through the India-US Trade Policy Forum, an existing platform for bilateral discussions, rather than through punitive trade measures.

The Section 301 investigation is part of Washington’s broader efforts to examine alleged unfair trade practices and supply chain concerns.

However, Indian industry representatives maintained that cooperation and dialogue would be more effective than imposing tariffs.

They said India and the US share deep economic ties, with businesses in both countries benefiting from integrated supply chains across sectors.

Additional duties, they argued, could create uncertainty for exporters and weaken the growth of bilateral commerce.

The final decision on any tariff action will depend on the outcome of the USTR review process and further consultations with stakeholders.