At the public hearing on the Office of the US Trade Representative’s (USTR) proposal, to impose levies on goods linked to forced labour, India raised concerns over the preferential tariffs the United States offers on textile exports that use US-origin cotton and related inputs.
Brij Mohan Mishra, Joint Secretary at the Ministry of Commerce noted that by granting lower tariff rates based on the use of American-sourced cotton, the mechanism creates an arbitrary condition that shapes and limits how foreign manufacturers source their materials, while not adequately tackling the underlying issue of forced labour.
Testifying before a USTR panel, Mishra while raising concerns over contradictions in the United States’ tariff policy, further stated that India would rather see such matters addressed through bilateral discussions instead of unilateral Section 301 investigations.
“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,” PTI quoted Mishra as saying.
Poornima Shenoy, FICCI’s US representative, said an additional tariff would raise costs not only for Indian exporters but also for US manufacturers, importers, retailers and ultimately consumers, noting that many US industries rely on long-standing sourcing relationships with Indian suppliers for quality, reliability and compliance.
“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,” she added.
CII representative Suchita Sonalika noted that India’s policy framework does not qualify as ‘unreasonable’ or ‘discriminatory’ under Section 301(b) of the Trade Act of 1974, asserting that India has a robust constitutional and statutory framework ensuring Indian companies cannot practice forced
Background
It may be recalled that the Office of the USTR initiated two Section 301 investigations in March 2026 covering 60 economies and later proposed tariffs on 54. India argued that the findings lack sufficient evidence to prove market distortion or unfair advantage due to the absence of forced labour import bans, and criticised the lack of economy-specific analysis.
Image courtesy: Business Recorder
