India urges the US to resolve tariff issues through trade talks, questioning inconsistencies in proposed forced labour tariffs that could harm supply chains.
New Delhi, India Jul 9, 2026 ALN: India has urged the United States to address concerns over proposed tariffs linked to forced labour through the ongoing bilateral trade agreement (BTA) negotiations rather than unilateral action. This call came during a public hearing before the US Trade Representative (USTR), where India questioned inconsistencies in Washington's tariff framework.
On Wednesday, Brij Mohan Mishra, Joint Secretary in the Ministry of Commerce, represented India at the USTR panel. He emphasized that trade-related concerns should be resolved within the framework of bilateral negotiations, stating, "India remains open to dialogue, but all concerns need to be dealt with in the framework of the India-US bilateral trade negotiations and not in a specific unilateral manner as is being provided in the Section 301 investigations."
India flagged contradictions in the US approach, noting that the USTR exempts around 1,600 products from scrutiny under the proposed forced labour measures. Mishra argued that these exemptions undermine the policy rationale aimed at addressing forced labour impacts in the global supply chain. The exemptions create a perception of inconsistency in the enforcement of the measures, leading to questions about the effectiveness of the US strategy in combating forced labour.
He pointed out that reduced US tariff rates on textile products manufactured using US-origin cotton and related inputs create arbitrary requirements that influence foreign manufacturers' sourcing decisions without adequately addressing forced labour concerns. This situation raises critical questions about the fairness and transparency of the tariff framework, potentially leading to trade imbalances that could affect both economies.
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, it proposed additional tariffs of 10% to 12.5% on imports from 54 economies, including India, which it claimed had failed to prevent goods made with forced labour from entering global supply chains. This move has raised significant alarm among Indian policymakers and industry leaders alike, who view it as a potential overreach of US trade policy.
India has challenged the legal and evidentiary basis of this proposal, arguing that the USTR has not demonstrated how the absence of import bans on forced labour goods distorts market conditions or harms compliant businesses. The Indian government stated, "A mere absence of a forced labour import prohibition cannot be construed as 'unreasonable' within the meaning of Section 301 of the Act." This assertion underscores India's commitment to defending its trade practices and maintaining its position in international markets.
Industry representatives also voiced their opposition to the proposed tariff hikes during the hearing. They warned that these tariffs would increase costs across the supply chain without effectively addressing the issue of forced labour. The implications of such tariffs extend beyond mere price increases; they could disrupt established trade relationships and supply chains that have been built over years.
Poornima Shenoy, representing FICCI in the US, stated, "An additional tariff will increase costs not only for Indian exporters but also for US manufacturers, importers, retailers, and ultimately American consumers." She emphasized that many US industries rely on long-standing sourcing relationships with Indian suppliers due to their quality and compliance standards. The potential for increased costs could lead to higher prices for consumers, impacting the overall .
Suchita Sonalika, representing 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 maintained that India's constitutional and statutory framework ensures that companies cannot practice forced labour. The assertion highlights India's commitment to ethical trade practices and its ability to produce goods without resorting to exploitative labour practices.
The issue of forced labour in global supply chains has gained increasing attention in recent years, with various governments and organizations pushing for stricter regulations and enforcement mechanisms. The US has been particularly vocal about its commitment to eradicating forced labour, often linking trade policies to human rights considerations. The Section 301 investigations initiated by the USTR are part of a broader strategy to hold countries accountable for labour practices that violate international norms.
India, as one of the world's largest economies and a significant player in global trade, has a vested interest in ensuring that its trade relationships are not jeopardized by unilateral actions that may not consider the complexities of its domestic policies and practices. The country has made strides in improving its labour laws and enforcement mechanisms, but the perception of forced labour remains a sensitive issue that requires careful navigation in trade discussions.
As the US considers its next steps regarding tariffs and forced labour, India remains committed to resolving these issues through dialogue and negotiation. The ongoing discussions highlight the complexities of international trade and the need for a balanced approach that considers the interests of all parties involved. The potential for escalating trade tensions could have far-reaching consequences, not only for India and the US but also for the global .
The outcome of these negotiations will likely set precedents for how trade relationships are managed in the context of human rights and labour standards. A cooperative approach may pave the way for more robust bilateral trade agreements, while a confrontational stance could lead to further fragmentation in international trade relations.
Ultimately, the situation underscores the importance of multilateral dialogue and cooperation in addressing global challenges such as forced labour. Both India and the US will need to navigate these complex issues carefully to foster a trade environment that promotes ethical practices while also supporting growth and development.
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