India To Challenge US Tariffs Next Week
WASHINGTON, DC – India will mount a coordinated challenge next week to a proposed US tariff on its exports, with government officials and leading industry bodies arguing that Washington’s findings on forced labor are legally flawed, unsupported by evidence, and could disrupt supply chains linking the world’s largest and fifth-largest economies.
The challenge will be presented before the Office of the US Trade Representative’s (USTR) Section 301 Committee on July 8.
Representing industry, Poornima Shenoy of the Federation of Indian Chambers of Commerce and Industry (FICCI) and Shuchita Sonalika of the Confederation of Indian Industry (CII) are scheduled to testify during Panel 8. They will be followed in Panel 9 by Dr. Brij Mohan of India’s Ministry of Commerce and Industry and Shubham Arora of the Agricultural and Processed Food Products Export Development Authority (APEDA). Vinnie Mehta, Director General of the Automotive Component Manufacturers Association (ACMA), will testify on July 9.
The hearings follow USTR’s proposal to impose an additional 12.5 per cent duty on imports from India under a Section 301 investigation into whether countries prohibit and effectively enforce restrictions on imports of goods produced with forced labor. The proposal is open for public comments before a final decision is taken.
India’s Ministry of Commerce and Industry has rejected the USTR’s conclusions, saying India has a “robust domestic legal regime reflecting a structured and progressive approach combining statutory prohibitions, institutional mechanisms, and ongoing policy measures aimed at reducing vulnerability to forced labor.”
The ministry also argues there is “inadequate and insufficient evidence” that India’s import regime burdens or restricts US commerce, a requirement for action under Section 301.
In its submission, CII argues that India’s policy framework does not qualify as “unreasonable” or “discriminatory” under Section 301 of the US Trade Act. It says India’s legal safeguards are anchored in Article 23 of the Constitution and reinforced by the Bonded Labor System (Abolition) Act, the Child Labor (Prohibition and Regulation) Amendment Act and the four Labor Codes adopted between 2019 and 2020.
CII also cites mandatory corporate reporting requirements and India’s ratification of key International Labor Organization conventions against forced labor and child labor.
Disputing examples cited in the USTR report, CII says India imported no rice from Myanmar and no tobacco from Malawi during the 2021-2025 review period. It also notes that India imported US$1.537 billion worth of American cotton during the period, nearly twice its imports from China, arguing there is “no material evidence” that India’s policies unfairly burden US commerce.
CII also says sectors such as forgings, foundries and agricultural machinery are capital-intensive and globally integrated, while Indian exporters supplying US manufacturers already operate under buyer-directed compliance systems and voluntary certification programs, making the use of forced labor fundamentally incompatible with their operations.
“The proposed 12.5 per cent additional duty would raise costs for US manufacturers dependent on Indian inputs without addressing the stated policy objective,” CII says. It urges USTR to pursue “compliance-based cooperation through the established India-US Trade Policy Forum as a more effective and proportionate alternative to punitive tariffs.”
FICCI has also opposed the proposal, saying Indian export supply chains serving the US market already operate within “well-established compliance frameworks” built around traceability, supplier due diligence, independent audits and responsible sourcing. It argues that broad-based tariffs would increase costs for American businesses and consumers while disrupting resilient supply chains that have expanded significantly in recent years.
APEDA will defend India’s agricultural exports before the committee, saying India’s rice sector “does not engage forced labor nor does it import inputs made with or using forced labor.” It argues that Indian rice exports comply with recognized standards and should not be subject to the proposed additional duties.
ACMA has sought an exemption for automotive components, saying India’s automotive component industry is organized, technology-driven and governed by established labor compliance frameworks. It argues that additional duties would disrupt integrated supply chains, increase costs for US manufacturers and create sourcing uncertainty for the American automotive industry.
Tmhe Section 301 investigations cover 60 economies and examine whether countries have imposed and effectively enforced legal prohibitions on imports produced wholly or partly with forced labor. USTR argues that the absence of such measures creates unfair competition for American businesses, while India argues the proposed tariff is unwarranted and not supported by the available evidence. (IANS)
