India asks America to review proposed 12.5% tariff, expresses strong reservations over USTR’s forced labor findings | Today’s news
Insisting that trade differences with the United States should be resolved through bilateral negotiations rather than unilateral measures, India has urged the US Trade Representative (USTR) to reconsider its proposed 12.5% tariff. New Delhi argued that the investigation under Section 301 into the alleged forced labor contained irregularities.
Addressing the public hearing, Brij Mohan Mishra, Joint Secretary, Ministry of Commerce, expressed India’s strong objections to the ÚSTR findings and emphasized the country’s constructive engagement on issues related to forced labour.
What did the Ministry of Trade say about the ÚSTR findings?
India also reaffirmed that the elimination of forced labor is a constitutional obligation and an obligation that it upholds under international law and established principles.
“India would like to highlight its concern over the ÚSTR report and findings against India,” he said.
ÚSTR did not comply with the relevant legal standards according to § 301 letter d) Trade Act. The mere absence of a ban on the importation of forced labor without an evidentiary basis of other statutory requirements cannot be construed as unreasonable under Section 301, he added.
The ÚSTR’s decision does not provide a rationale for nationwide tariffs and impermissibly lumps 46 economies (including India) into a single category, according to a written transcript of the hearing held on July 8 and posted on the ÚSTR’s website.
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ÚSTR’s Section 301 investigation focuses on whether countries have failed to prohibit and effectively prevent the importation of goods produced with the use of forced labor.
India argued that the methodology adopted in the investigation is fundamentally flawed, arguing that the findings are based on case studies involving only a limited number of economies, drawing broader conclusions from overall trade flows.
According to India, the report relies on aggregated trade data and assumes that goods imported into the economy flagged as potentially linked to forced labor are subsequently exported to the United States without providing sector- or country-specific evidence or establishing direct links to forced labor.
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In relation to India, there is insufficient and insufficient evidence that the lack of a ban on forced labor imports creates an unfair competitive advantage at the expense of American industry, he said.
“It concludes that the ÚSTR will reconsider the imposition of duties in light of the discrepancies found in the report in the Federal Register notice. We request that any trade issues be resolved through bilateral trade negotiations between India and the US, 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 issue.
“Current investigation against India may be withdrawn without prejudice”
Shreyans Gupta, first secretary at the Indian Embassy in Washington, DC, on behalf of the Agricultural and Processed Food Export Development Authority (APEDA), said the export promotion body objects to the ÚSTR’s comments on the importation of rice allegedly produced by forced labor into India and the alleged impact of those imports in distorting competitive conditions for US rice exports and domestic sales.
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It is important to note that India’s rice imports are very small and cater to targeted demands for specific and specialized rice varieties.
Gupta said that the total 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 regulatory controls are in place to prevent the export of imported rice from India that has been produced through forced labour.
Export of rice from India to the US is permitted only from rice mills and processing units registered with the Department of Agriculture.
“For these reasons, the current investigation against India may be withdrawn without prejudice,” Gupta said, asking that Indian rice be exempted from the proposed tariff if the proceedings continue.
The Ficci Chamber of Industry said the proposed additional tariff deserves careful reconsideration.
“The additional duty will increase costs not only for Indian exporters, but also for US manufacturers, importers, retailers and ultimately US consumers,” the chamber said, adding that higher tariffs would increase costs for businesses that already comply.
It calls for a reconsideration of the proposed additional tariffs in light of Indian legal and regulatory safeguards, the extensive compliance mechanisms adopted by Indian industry, and the potential implications for legitimate trade and resilient US-Indian supply chains.
The CII also stated that the proposed additional tariff of 12.5% is neither supported by the evidence presented nor likely to enhance the stated policy objective.
The USTR report does not find that India’s policy framework burdens US trade, the chamber said.
ÚSTR launched two separate Section 301 investigations on March 11 and 12, 2026, examining 60 economies over concerns related to forced labor and industrial overcapacity.
On June 3, it released the results of its investigation into forced labor and proposed additional tariffs on imports from the monitored economies.
Under the proposal, imports from Canada, Ecuador, the European Union, Indonesia, Mexico and Pakistan would face a 10 percent tariff, while goods from 54 other economies, including India and China, would be subject to a proposed 12.5 percent tariff.
The proposed tariffs have not yet been finalized. ÚSTR is expected to review public comments and testimony before making a final decision on the tariff plan.
