In its submission, India said the USTR had wrongly assumed that forced labour automatically gives Indian exporters an unfair competitive advantage over US companies.
“The initiation notice assumes that forced labour results in an automatic competitive advantage to Indian exporters to the detriment of US industry and workers,” India said, adding that there is no evidence to show Indian exports confer any artificial advantage or burden US commerce.The USTR launched the Section 301 investigation on March 11 into alleged forced labour practices involving India and nearly 60 other economies. A parallel probe into excess industrial capacity also covers India and 15 other economies across sectors such as petrochemicals and textiles.
India has consistently rejected both allegations.In an earlier submission filed in April, New Delhi argued that the investigations do not satisfy the legal requirements under Sections 301 and 302 of the Trade Act and urged the USTR to terminate them.
The government also said trade concerns should be addressed through the proposed India-US Bilateral Trade Agreement (BTA), rather than through unilateral tariff measures.
India maintained that its estimated $42 billion trade surplus with the United States in 2025 reflects broader macroeconomic factors rather than unfair trade practices. It also argued that its share in US imports is significantly smaller than that of several other trading partners and cannot be blamed for widening the US trade deficit.
The hearing comes at a crucial time for bilateral trade negotiations. Government sources had earlier indicated that India plans to conclude the proposed trade agreement with the US after the outcome of the Section 301 investigations.
If a trade deal is not finalised before the current 10% US reciprocal tariff expires on July 24, Indian exports could become subject to standard Most Favoured Nation (MFN) tariff rates.
Also Read: Explained: What is Section 301 and why is India concerned about it?
