India Challenges US Section 301 Probe on Forced Labour Allegations, Seeks Review of Proposed 12.5% Tariff

Government questions investigation methodology, highlights labour safeguards and calls for bilateral discussions during ongoing India-US trade negotiations.

India has formally responded to the United States' Section 301 investigation concerning alleged forced labour in Indian imports, questioning the approach adopted by the Office of the US Trade Representative (USTR) and requesting reconsideration of the proposed 12.5% additional tariff.

According to the Ministry of Commerce and Industry, the USTR initiated a broad-based investigation across 60 economies without conducting economy-specific, product-specific or industry-specific assessments of India's laws, policies and practices. India has argued that such an approach does not adequately reflect the country's legal and regulatory framework.

The Government also stated that the proposed tariff forms part of Washington's wider efforts to rebuild its tariff structure following the US Supreme Court's verdict on reciprocal tariffs. It noted that the Section 301 investigation is also linked to the ongoing India-US trade agreement negotiations.

India Calls for Bilateral Dialogue

Public hearings on the forced labour investigation began on Tuesday, with the Indian Government and industry representatives scheduled to present their submissions on Wednesday.

India has maintained that the USTR has not satisfied the legal threshold required under Section 301(d) of the Trade Act by establishing that India's acts, policies or practices relating to imports are unreasonable.

In its submission, India argued that the USTR relied primarily on case studies from a limited number of countries rather than conducting a country-specific or product-specific assessment. The Government further stated that the investigation had not established a direct causal relationship between alleged forced labour import restrictions and any adverse impact on US commerce.

US Report Covers Multiple Commodities

The USTR report identified rice, cotton and tobacco among the commodities where the use of forced labour had affected US exports.

India noted that it continues to import rice from the United States and remains one of the few countries to do so. On cotton, India stated that US exports to India declined from $213 million in 2021 to $392 million in 2025, while China's cotton exports to India declined from $160 million to $109 million during the same period.

According to India's submission, the increasing market share of US cotton alongside declining third-country competition indicates that India's conduct has not adversely affected US commerce.

Government Highlights Existing Labour Framework

India stated that it has implemented multiple legal and institutional safeguards addressing labour rights, including constitutional protections, criminal laws and labour legislation.

The Government also referred to the National Guidelines on Responsible Business Conduct and the SEBI Business Responsibility and Sustainability Reporting (BRSR) framework, stating that these measures promote transparency, responsible business practices and supply-chain due diligence. It noted that these frameworks are recognised by the International Labour Organization (ILO).

Section 301 Review Covers Multiple Countries

The report noted that, apart from India, the USTR is also examining policies related to alleged manufacturing overcapacity and its impact on the US industrial base in the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan, Bangladesh, Mexico and Japan.

According to the report, the findings of the investigation could influence future decisions on additional tariff measures.