India on Wednesday, 8 July formally challenged the U.S. Trade Representative (USTR) at a public hearing in Washington, accusing the agency of disregarding evidence and arguments submitted by New Delhi in its Section 301 investigation into forced labour — an inquiry that has led to a proposed 12.5 per cent tariff on nearly all Indian imports.

The challenge was mounted by Dr. Brij Mohan of India's Ministry of Commerce and Industry, who told the USTR committee that the agency's report had failed to adequately consider India's prior submissions and engagement during the investigation.

Four Principal Objections

Dr. Mohan laid out four distinct legal and methodological objections to the USTR's findings. First, he argued that the investigation had not met the legal standards set out in Section 301 of the U.S. Trade Act, contending that the mere absence of a specific import prohibition cannot, by itself, constitute an unreasonable trade practice under that statute.

'The USTR has neither identified nor engaged with the discrete elements of Section 301 for any country, including India, that directly amounts to an unreasonable act, policy or practice,' Dr. Mohan said, adding that the determination also marked a departure from previous USTR Section 301 investigations.

Second, India rejected the assumption that countries without explicit bans on goods produced with forced labour were effectively condoning such practices. Dr. Mohan cited the International Labour Organization (ILO), which recognises that eliminating forced labour requires multiple, country-specific policy instruments — of which import bans are only one.

Flawed Methodology, Absent Causal Link

Third, India criticised the proposal to impose a blanket 12.5 per cent country-wide tariff, arguing that the underlying methodology drew on studies covering only a handful of economies and relied on broad trade patterns rather than sector-specific or product-specific evidence relating to India. 'The adopted methodology is particularly flawed,' Dr. Mohan said.

Fourth, and perhaps most pointedly, India argued that the USTR had failed to establish any causal link between India's trade policies and harm to U.S. commerce. Dr. Mohan pointed to Appendix A of the USTR's own report, contending that trade data on cotton, rice, and tobacco actually showed rising U.S. exports and negligible or declining third-country competition in India — directly contradicting the report's conclusions.

'There is inadequate, insufficient evidence' that India's lack of an import prohibition creates an unfair competitive advantage for Indian exporters or harms American industry, he said.

India's Broader Constitutional Stand

Dr. Mohan also challenged the methodology used in the report's appendices, saying they merely identified overlapping trade flows rather than demonstrating that goods allegedly made with forced labour were actually incorporated into exports shipped to the United States from India.

He stressed that India remained committed to eliminating forced labour 'as a constitutional obligation, law and a matter of principle,' framing New Delhi's objection not as a defence of exploitative practices but as a pushback against what it characterises as an legally insufficient and methodologically unsound process.

India's Preferred Path: Bilateral Dialogue

Dr. Mohan urged the USTR to reconsider the proposed tariff, citing what he described as internal inconsistencies between the report and the Federal Register notice. He indicated that India remained willing to engage constructively with Washington through consultations on any specific concerns, but maintained that such issues should be resolved through bilateral trade discussions rather than unilateral measures under Section 301.

The hearing marks a significant escalation in trade tensions between the world's two largest democracies, coming at a moment when both sides are simultaneously negotiating a broader bilateral trade agreement. How the USTR responds to India's formal objections is expected to shape the trajectory of those negotiations.