The Indian government has formally requested the U.S. Trade Representative (USTR) to reconsider its proposal to impose a 12.5% additional tariff on Indian products, arguing that the move does not satisfy legal requirements and lacks evidentiary support. In a nine-page submission filed ahead of hearings starting on Tuesday, the Commerce and Industry Ministry contended that the USTR failed to provide economy-specific evidence linking Indian exports to forced labour practices, according to a report by Business Today.
India's Formal Submission to USTR
India's submission, prepared by the Commerce and Industry Ministry, asserts that the USTR has not satisfied the relevant legal standard under Section 301(d) of the U.S. Trade Act. The government argued that the USTR failed to meet evidentiary requirements to establish how the absence of import bans on forced labour distorts market conditions or undermines the profitability of compliant U.S. firms.
"In relation to India, there is inadequate and insufficient evidence that the lack of forced labour import ban causes an alleged unfair comparative advantage to the detriment of U.S. industry," the government stated in its submission, as quoted by Business Today.
Key Argument: The determination lacks evidence regarding India's acts, policies, or practices burdening or restricting U.S. commerce.
Industry Opposition from Indian Companies
Several major Indian companies have also petitioned against the tariff move, including Reliance Industries, Alok Industries, Shahi Exports, and unnamed solar manufacturers. According to the report, these companies view the proposed tariffs as a replacement for Donald Trump's reciprocal tariffs, which were declared illegal by the U.S. Supreme Court.
A group of Gujarat-based companies—Parth Foods, Hanumant Foods, Maruti Exports, and Rajdhani Dehydration—supplying dehydrated onions and garlics to American firms, cautioned that the tariffs would mean higher costs for U.S. consumers, including for seasoning products.
Legal and Evidentiary Arguments
India maintained that forced labour in global supply chains is best addressed through a combination of domestic criminal labour-law enforcement and an adequate due diligence framework that includes risk mitigation and remedial measures. The government emphasized that for findings to "carry legal and factual weight," there must be economy-specific evidence, which the USTR has not undertaken. Instead, the USTR relied on case studies and broad patterns of trade data.
Trade Data Examples Cited by India
To illustrate the lack of adverse impact on U.S. commerce, India provided three examples from the USTR's own report:
| Commodity | Export Value (Earlier Year) | Export Value (Later Year) | Notes |
|---|---|---|---|
| American tobacco | $225,000 (2021) | $3.5 million (by later date) | Imports rose sharply; no imports from Malawi |
| Myanmar-origin goods | No imports from Myanmar | — | U.S. was among few countries shipping the commodity to India |
| U.S. cotton | $213 million (2021) | $392 million (2025) | Imports increased while Chinese imports declined |
The government argued that these figures demonstrate no adverse impact on U.S. commerce resulting from India's alleged failure to ban forced labour imports. The tobacco example showed U.S. exports to India growing from $225,000 in 2021 to $3.5 million, while Malawi's exports remained zero. Similarly, U.S. cotton exports to India rose from $213 million in 2021 to $392 million in 2025, even as Chinese cotton imports to India declined.
Implications for Trade Relations
The dispute highlights ongoing tensions in U.S.-India trade relations, with the USTR's proposal potentially affecting a wide range of Indian exports. Indian companies and the government have signaled strong opposition, arguing that the tariffs are not backed by solid evidence and would ultimately harm U.S. consumers and businesses reliant on Indian inputs. The outcome of the hearings and subsequent USTR decision will be closely watched by importers, exporters, and trade policy professionals on both sides.
Sources:
