India has urged the United States Trade Representative (USTR) to reconsider its proposal to impose an additional 12.5% tariff on Indian goods, arguing that the findings of its Section 301 investigation into forced labour lack sufficient legal and factual basis.
The government said trade concerns between the two countries should be addressed through ongoing bilateral negotiations rather than unilateral tariff measures.
Appearing before a USTR panel, Department of Commerce Joint Secretary Brij Mohan Mishra said India remained committed to eliminating forced labour as a constitutional obligation and under international law.
However, the USTR had not met the legal standards required to establish that India’s policies were “unreasonable” under Section 301 of the US Trade Act, he said.
India challenges legal basis
India argued that the absence of a specific ban on imports produced using forced labour could not, by itself, justify action under Section 301 without evidence that other statutory conditions had been met.
It also questioned the USTR’s decision to place India alongside 45 other economies facing the proposed 12.5% tariff, saying the report did not offer a country-specific rationale for such a broad measure.
According to India’s submission, the USTR relied on selected case studies and broad trade patterns without establishing sector- or country-specific links between goods imported by India and products subsequently exported to the US.
There was also inadequate evidence to show that India’s policy framework gave its exporters an unfair competitive advantage or caused injury to American industries, Mishra said.
“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 said, urging the USTR to reconsider the tariff in view of the alleged inconsistencies in its findings.
India also expressed its willingness to engage with the US through consultations on any specific concerns.
APEDA contests findings on rice
The Agricultural and Processed Food Products Export Development Authority (APEDA) separately challenged the USTR’s observations on India’s rice trade.
Representing APEDA, Shreyans Gupta, First Secretary at the Indian Embassy in Washington, said India imported only small quantities of rice to meet demand for niche and speciality varieties.
The value of rice imported by India was less than 3% of the value of rice it exported to the US, he said. India also maintained regulatory checks to ensure that imported rice was not re-exported as Indian produce.
Rice exports to the US are permitted only from mills and processing facilities registered with the agriculture ministry, Gupta said, requesting that the investigation against India be withdrawn. APEDA sought an exemption for Indian rice from the proposed tariff in case the proceedings continued.
Industry warns of higher costs
Industry bodies FICCI (Federation of Indian Chambers of Commerce and Industry) and the CII (Confederation of Indian Industry) also opposed the tariff proposal.
FICCI said the additional duty would raise costs not only for Indian exporters but also for US manufacturers, importers, retailers and consumers. Businesses that already comply with labour and supply-chain standards would face higher costs, it said.
The chamber urged the USTR to consider India’s legal safeguards, compliance mechanisms adopted by domestic companies and the implications of the tariff for India-US supply chains.
CII argued that the proposed 12.5% duty was neither supported by the evidence presented nor likely to advance the stated objective of combating forced labour. The USTR report had not established that India’s policy framework burdened US commerce, it said.
Tariff proposal yet to be finalised
The USTR initiated investigations covering 60 economies on March 12 to determine whether their failure to impose and effectively enforce restrictions on imports produced using forced labour burdened US commerce. It subsequently concluded that the policies of all 60 economies were actionable under Section 301.
The US has proposed a 10% additional tariff for 14 economies that have introduced some form of forced-labour import restriction, made related commitments under reciprocal trade agreements or adopted a partial regime. A higher 12.5% duty has been proposed for the remaining 46 economies, including India and China.
The measure has not yet been finalised. The USTR will consider written submissions and testimony received during the public hearings before deciding whether to impose the tariffs.