According to industry sources, India’s constitutional safeguards, labour laws and institutional enforcement mechanisms adequately address labour rights. They said India’s acts, policies and practices do not burden or restrict US commerce, contrary to the assumptions underlying the investigation.
The sources also argued that imposing a uniform tariff on all imports fails to distinguish between compliant and non-compliant supply chains. Instead, they said, the proposed tariff would increase costs for US manufacturers, importers, retailers and consumers that rely on established sourcing relationships with Indian suppliers, without necessarily strengthening efforts to prevent imports made using forced labour.
They further maintained that the absence of a specific ban on importing goods produced through forced labour does not amount to a policy that encourages or facilitates such imports. Nor, they said, does it create an unfair competitive advantage for Indian exporters or disadvantage foreign companies.
Industry sources added that India’s legal framework, coupled with compliance systems adopted by export-oriented businesses, demonstrates an ongoing commitment to responsible business conduct, risk mitigation and internationally recognised labour standards.
“The existence or absence of a particular legislative mechanism cannot, by itself, establish that goods exported from India are produced using forced labour or that Indian export supply chains present a heightened risk,” the sources said, arguing that forced labour risks should instead be assessed on evidence relating to specific sectors, products and supply chains.
They also urged the USTR to carefully evaluate the impact of the proposed tariffs, particularly in sectors where exporters already operate under robust legal, commercial and buyer-driven compliance frameworks.
India has opposed the proposed 12.5% tariff during hearings before the USTR, arguing that the investigation does not satisfy the legal requirements for initiation under Section 301 of the US Trade Act of 1974.
In its submission earlier this month, India said the USTR’s initiation notice wrongly assumes that forced labour automatically gives Indian exporters a competitive advantage over US producers. It argued there is no evidence that Indian exports confer any artificial advantage or burden or restrict US commerce.
Background
The USTR launched the Section 301 investigations on March 11 against India, China, the European Union, Japan and several other economies over alleged unfair trade practices affecting American manufacturing.
Separate investigations cover allegations of forced labour involving around 60 economies and excess industrial capacity involving 16 economies, including India.
Earlier this year, India rejected both allegations, arguing that the investigations fail to meet the legal threshold under Sections 301 and 302 of the Trade Act of 1974.
India has also urged the US to resolve trade concerns through the ongoing Bilateral Trade Agreement (BTA) negotiations rather than through unilateral tariff measures. Government submissions have argued that India’s $42 billion trade surplus with the US in 2025 reflects broader macroeconomic factors rather than unfair trade practices and that India accounts for a relatively small share of overall US imports.