India pitches cooperation over USTR tariffs

Washington, July 8 (IANS) India on Wednesday urged the United States to pursue cooperation rather than punitive tariffs to address forced labour concerns, telling a U.S. Trade Representative (USTR) hearing that strengthening compliance mechanisms would be more effective than imposing blanket duties on Indian exports.

Responding to questions from USTR officials, Shuchita Sonalika, representing the Confederation of Indian Industry (CII), said India favoured collaborative efforts to improve labour standards rather than the broad trade restrictions proposed in the Section 301 investigation.

A USTR official asked how exempting Indian products from additional duties would encourage countries under investigation to eliminate unfair labour practices.

Sonalika replied that “compliance and cooperation-based mechanisms would be far more effective than the application of tariffs.”

She said CII had been working with the International Labour Organisation (ILO) and the United Nations Development Programme (UNDP) to promote responsible business practices and would welcome greater cooperation with U.S. authorities to further strengthen India’s compliance systems.

“For example, CII has been working with the International Labour Organisation and the UNDP as well on responsible business practices. And we would welcome cooperation with relevant US authorities on enabling further strengthening of our systems,” she said.

According to Sonalika, Indian companies have already established extensive internal safeguards to prevent forced labour across supply chains.

She cited documented codes of conduct, ethics policies, supplier codes of conduct and environmental, social and governance (ESG) frameworks that many Indian companies voluntarily maintain.

She also referred to India’s Business Responsibility and Sustainability Reporting (BRSR) framework introduced by the Securities and Exchange Board of India (SEBI), which mandates disclosures by the country’s top 1,000 listed companies. She noted that a BRSR Lite framework has also been introduced for small and medium enterprises.

Earlier in her prepared testimony, Sonalika told the hearing that India fully supports eliminating forced labour from global supply chains and that “forced labour has no place in international trade.”

However, she argued that the proposed 12.5 per cent additional tariff was “neither supported in the evidence presented nor likely to advance the stated policy goal” and would instead “penalise a compliant industry.”

She said India already has “a comprehensive legal and institutional framework” prohibiting forced labour, including constitutional protections, labour laws, criminal penalties and ratification of the International Labour Organisation’s core conventions.

In addition, she said Indian industry already operates within “a rigorous global compliance system”, pointing to human rights due diligence by aluminium producers, continuous audits of textile exporters by U.S. buyers and international certification bodies, strict labour compliance in the foundry and forging sectors, and engineering-driven agricultural machinery manufacturing.

Sonalika argued that Indian inputs are deeply integrated into U.S. manufacturing supply chains and warned that a 12.5 per cent tariff would increase costs for American manufacturers and disrupt established sourcing relationships, without addressing any demonstrated forced labour concerns.

She urged the USTR to avoid imposing tariffs and non-tariff measures on Indian industry and instead strengthen engagement through existing bilateral mechanisms, including the India-U.S. Trade Policy Forum.

“We believe compliance-based cooperation, not punitive tariffs, is the most effective pathway forward,” Sonalika said.

–IANS

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