Synopsis

India has asked the US to reconsider proposed tariffs on its goods. The US Trade Representative is considering a 12.5 percent tariff on Indian imports. India disputes the US findings regarding forced labor and market distortion. The country is willing to engage in dialogue to address US concerns. Final decisions on these proposed tariffs are pending further review.

USTR's Sec 301 probe on forced labour concerns: India urges reconsideration of proposed 12.5 pc tariffs

India has requested the US to reconsider the proposal to impose a 12.5 per cent tariff on India for allegedly failing to prohibit the import of goods produced with forced labour, and has expressed its willingness to engage with the US Trade Representative through dialogues to address any specific concerns.

In its response to the report in Section 301 investigations of the acts, policies, and practices of various economies related to the failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labour, India has stated that the USTR has neither identified nor engaged with the discrete elements of Section 301 of the Act for any country, including India, that directly amounts to an unreasonable Act, policy or practice.

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 54 economies.

The proposal includes a 10 per cent tariff on imports from Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan, and a 12.5 per cent tariff on imports from 48 other economies, including India and China.

The measure remains a proposal and 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," according to the submission made by India to the USTR on July 6.

India has also submitted that the USTR has failed to meet the evidentiary requirements to establish how the absence of bans in these countries conclusively or substantially distorts market conditions and undermines 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.

The country has stated that the USTR has not undertaken an economy-specific analysis of laws and practices across the 60 investigated economies; instead, it has issued a sweeping determination that all such approaches are inadequate without considering the specific measures being implemented by the economies.

"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," it added.

Public hearings will be held on July 7 on the report. The USTR will consider the comments and testimony received before taking a final decision on the proposed measures.