India seeks review of US’ forced labour investigation

The USTR determination does not provide a rationale for countrywide tariffs and impermissibly clubs 46 economies (including India) into a single category, according to the written transcript of the hearing, held on July 8 and published on the USTR website.

The report, he said, relies on broad data and it presupposes that an economy’s imports flagged for this stuff involving imports made with forced labour are exported to the US without providing any sector- or country-specific evidence and actual linkages with forced labour. In relation to India, there is inadequate and insufficient evidence that a lack of a forced labour import ban causes an unfair competitive advantage to the detriment of the American industry, he said.

“In conclusion, it is submitted that the USTR reconsider the imposition of tariffs in light of the identified inconsistencies in the report in the Federal Register notice. We ask that any trade problems be addressed within the framework of the India-US bilateral trade negotiation, not through unilateral measures such as this investigation,” he added.

Arguing on behalf of Indian industry, Anil Rajvanshi, President of Reliance Industries Limited (RIL), said that their petrochemical intermediates use crude oil and ethane sourced from low-risk origins, including the United States, and are far removed from sectors like agriculture where state-imposed forced labour is typically documented.

Furthermore, they do not subcontract to third-party factories and maintain a strict code of conduct subject to ESG audits. RIL pointed out that the US already imposes significant duties on Indian products like PSF and PET resin, with rates already in the mid-teens to high twenties. Adding a 12.5% Section 301 duty would stack tariffs to between 30 and 40%, which would increase costs and risk production cuts for US downstream users while having little impact on forced labour incentives, Rajvanshi said.

Rajvanshi warned that levying these tariffs would “kill the remaining small portion of the textile industry that exists in the US” because the downstream industry requires a full value chain of raw materials at competitive prices to flourish.

Making submissions on behalf of Agricultural and Processed Food Products Export Development Authority (APEDA), Shreyans Gupta, First Secretary in the Embassy of India in Washington, DC, said that the export promotion body objects to the USTR’s observations on the import of rice allegedly made with forced labour into India and the alleged impact on such imports in distorting the competitive conditions for the export and domestic sale of rice produced in the US.

Gupta said that the overall value of rice imported into India in relation to the value of rice exported from India to the US is not even 3%.

He added that there are regulatory checks in place that prevent exports of imported rice from India that have been produced with forced labour.

Export of rice from India to the US is allowed only from the rice mills and processing units registered with the agriculture ministry.

“For these reasons, the present investigation against India may be rescinded without prejudice,” Gupta said, requesting exemption for Indian rice from the proposed duty if the proceedings continue.