India Challenges US Tariff Plan Over Forced Labour Claims, Seeks Fair Approach

India has raised concerns over inconsistencies in the US approach to imposing tariffs on goods allegedly linked to forced labour during a public hearing conducted by the US Trade Representative (USTR).

Brij Mohan Mishra, Joint Secretary in the Ministry of Commerce, told a USTR panel on Wednesday that the US exempts 1,600 items that cannot be produced or grown domestically from forced labour scrutiny.

"What we submit is that the exemptions provided by the USTR not only undermine the policy rationale of addressing forced labour impact in the global supply chain but also of preventing such impact caused by circumvention practices," Mishra said, in response to questions from the USTR panel.

Mishra also pointed out that the US provides reduced tariff rates on textile exports manufactured using US cotton and related items.

"By providing reduced tariff rates on the basis of imports of US-origin textile inputs, the textiles mechanism operates as an arbitrary requirement that influences and constrains the sourcing decisions of foreign manufacturers, without fully addressing the concern of forced labour," Mishra said.

He said India remained open to discussions and that concerns should be addressed through the India-US bilateral trade negotiations rather than through unilateral action under Section 301 investigations, PTI reports.

Industry bodies warn of higher costs from proposed tariffs

Representatives of industry bodies FICCI and CII also opposed the US proposal to impose tariffs ranging from 10% to 12.5% on imports from 60 economies that Washington says have failed to prevent goods made with forced labour from entering global supply chains.

"An additional tariff will increase costs not only for Indian exporters, but also for US manufacturers, importers, retailers and ultimately American consumers," Poornima Shenoy, FICCI representative in the US, said in her testimony before the USTR panel.

Shenoy said several US industries depend on long-standing sourcing ties with Indian suppliers due to their quality, reliability and compliance standards.

"Higher tariffs for these established supply chains will raise costs for businesses that already follow compliance standards. It will not help in identifying goods produced with forced labour. It would simply make trusted supply chains more expensive," Shenoy said.

CII representative Suchita Sonalika said India's policy framework does not qualify as 'unreasonable' or 'discriminatory' under Section 301(b) of the Trade Act of 1974.

Sonalika also said India has a strong constitutional and statutory framework to ensure that companies cannot engage in forced labour.

India challenges USTR findings on forced labour investigations

The USTR launched two separate Section 301 investigations on March 11 and March 12, 2026, covering 60 economies over concerns related to forced labour and excess industrial capacity.

On June 3, the USTR issued its findings in the forced labour investigation and proposed additional tariffs on imports from 54 economies.

India has argued that the USTR has failed to provide sufficient evidence to establish that the absence of forced labour bans in these countries conclusively or substantially distorts market conditions and affects the profitability of compliant firms.

"India submits that a mere absence of a forced labour import prohibition, without meeting the evidentiary basis of other statutory requirements, cannot be construed as "unreasonable" within the meaning of Section 301 of the Act," it added.

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India said the USTR had not conducted an economy-specific assessment of laws and practices across the 60 investigated economies and had instead issued a broad determination without considering individual measures adopted by each economy.

"In relation to India, there is inadequate and insufficient evidence that the lack of a forced labour import ban causes an alleged unfair comparative advantage to the detriment of the US industry. Evidence across sectors of major exports of India to the US does not suggest any linkage with forced labour inputs," it added.