India asks America to review proposed 12.5% tariff, conveys strong reservations over USTR’s forced labour findings

India Urges U.S. to Reconsider 12.5% Tariff, Questions USTR’s Forced Labour Findings

Theindiapostdaily.com – India has expressed a preference for resolving trade disputes with the U.S. through bilateral dialogue rather than unilateral actions, prompting a call for the USTR to reassess its proposed 12.5% tariff on Indian imports. During a public hearing, Brij Mohan Mishra, Joint Secretary in the Department of Commerce, highlighted concerns over the consistency of the USTR’s Section 301 investigation into alleged forced labour practices.

Challenges to the USTR’s Methodology

The USTR’s findings, according to India, lack sufficient evidentiary support under Section 301(d) of the Trade Act. Mishra argued that the absence of a forced labour import ban alone does not justify countrywide tariffs, noting that the USTR’s determination fails to justify the imposition of such measures across all economies. Additionally, the report is criticized for grouping 46 nations, including India, into a single category without establishing direct links to forced labour.

“The USTR determination does not provide a rationale for countrywide tariffs and impermissibly clubs 46 economies into a single category,” the hearing transcript stated.

India’s Commitment to Eliminating Forced Labour

India reiterated its constitutional and international legal obligation to eradicate forced labour, asserting that its practices align with global standards. Mishra emphasized that the USTR’s report assumes imported goods flagged for potential forced labour ties are subsequently exported to the U.S., without presenting sector-specific or country-specific evidence.

“India would like to highlight its concerns with the USTR’s report and findings against India,” Mishra said.

Rice Import Submissions and Industry Concerns

Shreyans Gupta, representing the Agricultural and Processed Food Products Export Development Authority (APEDA), argued that the USTR’s focus on rice imports overlooks India’s minimal reliance on such goods. Gupta noted that India’s rice imports account for less than 3% of its total rice exports to the U.S., and that regulatory frameworks already prevent the movement of rice produced with forced labour into U.S. markets.

“India’s imports of rice are very small and cater to targeted demands of specific and niche rice varieties,” Gupta stated.

Industry body Ficci added that the proposed tariff could raise costs for both Indian exporters and U.S. businesses, ultimately affecting American consumers. The organization urged a thorough review of the measure, stressing its broader economic implications.

India remains open to engaging with the USTR through consultations, provided the findings are re-evaluated in light of the identified inconsistencies. The country has requested that trade issues be resolved within the framework of its bilateral negotiations with the U.S., rather than through unilateral investigations.