India Urges Review of Proposed US Tariff, Cites Errors in USTR Forced Labour Report

India has formally pushed back against a proposed U.S. tariff tied to forced labour allegations, telling the Office of the U.S. Trade Representative (USTR) at a public hearing that its investigation contains significant legal and methodological flaws and urging that the additional 12.5% duty be reconsidered.

India's Formal Position at the Hearing

Speaking at the USTR's public hearing held July 8, Joint Secretary in India's Department of Commerce Brij Mohan Mishra laid out New Delhi's case directly. He said India would like to highlight its concerns with the USTR's report and findings against India, and argued the agency had not satisfied the relevant legal standards under Section 301(d) of the Trade Act. Mishra framed the elimination of forced labour as something India takes seriously both as a constitutional obligation and as a matter of international law and principle, positioning India's objection as a dispute over evidence and process rather than a rejection of the underlying policy goal.

The Core Legal Argument

India's central contention is that the USTR's findings don't meet the bar required to justify tariffs under U.S. trade law. Mishra argued that a mere absence of a forced labour import prohibition, without an evidentiary basis for other statutory requirements, cannot be construed as "unreasonable" under Section 301. He also took issue with how the USTR structured its findings, noting the determination does not provide a rationale for countrywide tariffs and impermissibly clubs 46 economies, including India, into a single category.

India also challenged the underlying research methodology directly. According to India, the adopted methodology is particularly flawed because the determination is based on case studies of only a handful of economies while relying on broad trade patterns, rather than country-specific analysis. The report relies on broad data and presupposes that an economy's imports flagged for involving forced labour are exported to the U.S., without providing sector- or country-specific evidence to support that assumption. On India specifically, Mishra argued there is inadequate and insufficient evidence that the absence of a forced labour import ban causes any unfair competitive advantage to the detriment of American industry.

India's Written Submission

Beyond the oral testimony, India also filed a formal written submission to the USTR on July 6. In it, 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 for any of the other economies under review. The submission stated that in view of the claims advanced, the identified gaps, and the lack of sufficient basis, India was requesting the U.S. reconsider the proposed tariffs against India, while remaining willing to engage constructively through consultation and dialogue on any specific concern.

New Delhi further argued that the USTR had not met the evidentiary threshold required to show how the absence of forced labour import bans meaningfully distorts market conditions or harms compliant firms, and separately accused the agency of issuing a blanket determination across all 60 economies under review without conducting country-specific assessments of their laws and enforcement practices.

India's Preferred Path Forward

Rather than unilateral tariff action, India has consistently pushed for a negotiated resolution. Mishra concluded his testimony by asking that any trade problems be addressed within the framework of India-U.S. bilateral trade negotiations rather than through unilateral measures like this investigation, and reiterated that the proposed additional tariffs should be reconsidered in light of India's legal and regulatory safeguards, the extensive compliance mechanisms already adopted by Indian industry, and the potential implications for legitimate trade and resilient U.S.-India supply chains.

Industry Backs the Government's Position

India's formal government objection echoes arguments already made by Indian industry bodies during the same hearing process. The Confederation of Indian Industry submitted that the proposed 12.5% additional tariff is neither supported by the evidence presented nor likely to advance the stated policy goal, arguing the USTR report does not establish that India's policy framework burdens U.S. commerce.

Background: How the Tariff Proposal Came About

The USTR launched two separate Section 301 investigations on March 11 and 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 these economies, with the proposal including a 10% tariff on imports from Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan, and a 12.5% tariff on India and other economies. The tariff would stack on top of India's existing temporary 10% reciprocal tariff already in place on exports to the U.S.

What's Next

With the public hearing period now closed, attention turns to whether the USTR will revise its proposal in response to India's formal objections and similar pushback from industry groups, or proceed with the tariff largely as originally proposed. India has signaled clear openness to a negotiated resolution through the existing bilateral trade relationship, but has not indicated what steps it might take if the USTR moves forward with the duty despite its objections.