India Challenges US Forced Labour Tariff Plan, Highlights Exemptions for 1,600 Critical Goods

India has pointed out inconsistencies in the United States' approach to tariffs on goods allegedly linked to forced labour, during a public hearing before the US Trade Representative (USTR). The Indian government noted that the US exempts 1,600 items deemed critical to its needs from forced labour scrutiny, undermining the policy's stated objective.

Testifying before a USTR panel on Wednesday, Brij Mohan Mishra, Joint Secretary in India's Ministry of Commerce, argued that the exemptions not only weaken the rationale of addressing forced labour in global supply chains but also fail to prevent circumvention practices. He also flagged that the US applies reduced tariff rates on textile products manufactured using US cotton, which he described as an arbitrary requirement that influences sourcing decisions without fully addressing forced labour concerns.

India reiterated its openness to dialogue, urging that all concerns be addressed within the framework of bilateral trade negotiations rather than through unilateral actions like the Section 301 investigations. The US launched two separate Section 301 investigations in March 2026, covering 60 economies over forced labour and excess industrial capacity. In June, the USTR proposed additional tariffs of 10 to 12.5% on imports from 54 economies, including India.

Representatives of Indian industry bodies FICCI and CII also presented their views. Poornima Shenoy, FICCI representative in the US, warned that additional tariffs would increase costs for Indian exporters, US manufacturers, and ultimately American consumers. She said many US industries rely on long-standing sourcing relationships with Indian suppliers that ensure quality and compliance, and higher tariffs would make trusted supply chains more expensive without helping to identify goods produced with forced labour.

Suchita Sonalika from CII argued that India's policy framework does not qualify as 'unreasonable' or 'discriminatory' under Section 301(b) of the Trade Act of 1974. She asserted that India has a robust constitutional and statutory framework that prohibits forced labour, and that Indian companies are compliant.

India also submitted that the USTR has failed to meet evidentiary requirements to establish how the absence of forced labour import bans in these countries substantially distorts market conditions. India stated that a mere absence of such a prohibition cannot be construed as 'unreasonable' without specific evidence. Furthermore, the USTR has not undertaken an economy-specific analysis of laws and practices across the 60 investigated economies, instead issuing a sweeping determination. India argued there is inadequate evidence regarding its own practices.