India Challenges US Forced Labour Investigation Over Tariff Risks

India is formally requesting a review of a US Section 301 investigation that threatens to impose a 12.5% tariff on Indian goods, citing significant procedural inconsistencies. As the July 24 deadline for these potential tariffs approaches, Indian officials argue that the United States Trade Representative (USTR) has failed to provide evidentiary support for its claims regarding forced labour. India currently rejects the broad categorization of its economy alongside 46 other nations, emphasizing that such unilateral measures lack a country-specific basis or clear linkage to forced labour practices within its borders.

During a public hearing, the Indian Department of Commerce stated that the USTR report ignores constitutional and legal obligations already upheld by India. Reliance Industries Limited (RIL) also warned that adding a 12.5% duty on top of existing rates—which already reach the high twenties—could push total costs to 40%. Such a move would likely destabilize the US downstream textile and petrochemical industries, which depend on a consistent and competitively priced value chain. Simultaneously, the Agricultural and Processed Food Products Export Development Authority (APEDA) contested claims regarding rice exports, asserting that only verified, registered mills participate in trade with the US.

India maintains that any concerns related to labor practices must be addressed through bilateral trade negotiations rather than punitive, blanket tariff actions. By highlighting the lack of sector-specific evidence, India is pushing for a total rescission of the current investigation. The government remains focused on proving that its regulatory frameworks for exports are robust, aiming to prevent unnecessary damage to the competitive conditions of Indian exports and protecting the downstream industries in the United States that rely on these inputs.