India Urges US to Drop Proposed 12.5% Tariff on Imports Over Forced Labour Probe

India has vehemently opposed Washington's move to impose an additional 12.5% tariff on its goods, saying the U.S. probe into alleged forced labour practices is sweeping, generalised and lacks country-specific facts.

The dispute stems from a large Section 301 investigation initiated by the Office of the United States Trade Representative (USTR). The probe covers 60 global economies, arguing that their failure to impose a strict domestic ban on imports of forced-labour products distorts global market conditions and harms U.S. workers.

A Broad Brush and Clearly Flawed Defence of India

In a detailed rebuttal sent directly to the USTR, New Delhi argued that Washington's approach rests on broad assumptions rather than objective proof:

No Individual Assessment The Ministry of Commerce and Industry pointed out that USTR has used a blanket accusation for dozens of countries instead of assessing India’s particular legal frameworks, including its stringent domestic constitutional protections and labour laws.

No Proof of Harm: India noted that the U.S. had not provided any evidence that India’s existing regulatory regime had caused any measurable, competitive or financial harm to U.S. domestic industries.

Contradictory claims: The USTR report pointed to commodities such as rice and cotton to allege trade distortion, Indian officials pointed out. The fact is that India is a major importer of American rice, and the growing U.S. market share in cotton shows that Indian trade practices are not harming American commerce. The U.S. also excluded more than 1,600 products from the tariffs, including coffee and cocoa, although the same sectors are flagged by the U.S. Department of Labour for global labour concerns.

Next Steps: This issue is still in an important consultation phase. While Washington has offered a lower 10% tariff for countries with partial restrictions, India has to pay a higher 12.5% bracket along with 47 other economies, including China. New Delhi has urged the U.S. administration to reconsider the move and has offered to settle the dispute through direct bilateral dialogue.