India urges US to reconsider proposed 12.5% tariff over forced labour allegations
By Shailesh Yadav, New Delhi, July 9
India has formally asked the United States to reconsider its proposal to impose a 12.5 per cent tariff on Indian goods, rejecting allegations that it has failed to prohibit the import of products made with forced labour. New Delhi has also offered to engage in dialogue with the US Trade Representative to address any specific concerns.
In its response to the USTR's Section 301 investigation report, India said the agency had failed to identify or substantiate any specific act, policy or practice that would qualify as "unreasonable" under the law either for India or any other country under review.
The USTR had launched two separate Section 301 investigations on March 11 and 12, 2026, examining 60 economies over concerns linked to forced labour and excess industrial capacity. On June 3, it released its findings on the forced labour probe, proposing fresh tariffs on 54 economies. Under the plan, India, China and 46 other economies would be subject to a steeper 12.5 per cent duty, while Canada, Ecuador, the European Union, Indonesia, Mexico and Pakistan would face a 10 per cent tariff.
The proposal has not yet been finalised.
"In view of the claims advanced, the identified gaps and lack of a sufficient basis, India requests the United States to reconsider the proposed imposition of tariffs against India. India remains willing to engage constructively with the USTR through consultation and dialogue on any specific concern," India said in its submission to the USTR on July 6.
New Delhi further argued that the USTR had not met the evidentiary threshold required to show how the absence of forced labour import bans in these countries meaningfully distorts market conditions or harms compliant firms. "A mere absence of a forced labour import prohibition cannot be construed as 'unreasonable' within the meaning of Section 301 of the Act," India stated.
It also accused the USTR of issuing a blanket determination against all 60 economies without conducting country-specific assessments of their laws and enforcement practices.
"In relation to India, there is inadequate and insufficient evidence that the lack of 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," the submission added.
— ANI
Reader Comments
I understand the US wanting to ensure ethical supply chains, but throwing blanket tariffs without specific evidence is unfair. India's response makes a good point - where's the country-specific assessment? Not everything should be a trade war.
While I support India's strong response, let's also be honest - we do have issues with labour exploitation in some sectors, especially in smaller factories. Instead of just rejecting the allegations, we should also use this as an opportunity to strengthen our own enforcement. Better to be proactive than defensive.
As an American, I think this is a fair response from India. If the US wants to investigate forced labour, it should do thorough country-by-country analysis rather than lumping everyone together. India has legitimate labour protections in place. Dialogue is the way forward, not punitive tariffs.
Exactly what I expected from our diplomatic corps - logical, evidence-based pushback. The USTR report does seem weak on specifics. But we must also ensure our exporters comply with international labour standards. This is a wake-up call to clean up any remaining issues in our supply chains.
There's a pattern here - the US uses these investigations as trade weapons. India is right to call them out. But let's not be naive; both countries use trade policies to protect their interests. The key is to negotiate a fair deal that doesn't hurt either side's economy.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.