India Urges US to Resolve Tariff Concerns Through Bilateral Talks

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, while questioning inconsistencies in Washington's tariff framework during a public hearing before the US Trade Representative (USTR).

Appearing before a USTR panel on Wednesday, Brij Mohan Mishra, Joint Secretary in the Ministry of Commerce, said India remained open to dialogue but stressed that trade-related concerns should be resolved within the framework of bilateral negotiations.

"At the same time, he said India remained open to dialogue, and 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 also flagged what it described as contradictions in the US approach, noting that the USTR exempts around 1,600 products that cannot be produced or grown domestically from scrutiny under the proposed forced labour measures.

"What we submit is that the exemptions provided by the USTR not only undermine the policy rationale of addressing forced labour impact in the global supply chain but also of preventing such impact caused by circumvention practices," Mishra said.

He further pointed to reduced US tariff rates on textile products manufactured using US-origin cotton and related inputs.

"By providing reduced tariff rates on the basis of imports of US-origin textile inputs, the textiles mechanism operates as an arbitrary requirement that influences and constrains the sourcing decisions of foreign manufacturers, without fully addressing the concern of forced labour," Mishra said.

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 issued findings in the forced labour investigation and proposed additional tariffs of 10% to 12.5% on imports from 54 economies that it said had failed to prevent goods made with forced labour from entering global supply chains.

India has challenged the legal and evidentiary basis of the proposal, arguing that the USTR has not demonstrated how the absence of import bans on forced labour goods substantially distorts market conditions or harms compliant businesses.

"India submits that a mere absence of a forced labour import prohibition, without meeting the evidentiary basis of other statutory requirements, cannot be construed as "unreasonable" within the meaning of Section 301 of the Act," it said.

India also argued that the USTR had failed to conduct an economy-specific assessment of the 60 jurisdictions under investigation and had instead issued a broad determination without adequately considering individual legal and regulatory frameworks.

"In relation to India, there is inadequate and insufficient evidence that the lack of a forced labour import ban causes an alleged unfair comparative advantage to the detriment of the US industry. Evidence across sectors of major exports of India to the US does not suggest any linkage with forced labour inputs," it added.

Industry representatives also opposed the proposed tariff hikes during the hearing, warning they would increase costs across the supply chain without advancing the stated objective of tackling forced labour.

Poornima Shenoy, representing FICCI in the US, said the additional tariffs would affect businesses and consumers on both sides.

"An additional tariff will increase costs not only for Indian exporters, but also for US manufacturers, importers, retailers and ultimately American consumers," Shenoy said.

She added that several US industries depend on long-standing sourcing relationships with Indian suppliers because of their quality, reliability and compliance standards.

"Higher tariffs for these established supply chains will raise costs for businesses that already follow compliance standards. It will not help in identifying goods produced with forced labour. It would simply make trusted supply chains more expensive," Shenoy said.

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 and maintained that India's constitutional and statutory framework ensures that companies cannot practice forced labour.

(With inputs from PTI)