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The U.S. authorities has projected to levy a tariff of 12.5% connected imports from 54 countries, including India, that it says person “failed to enforce and efficaciously enforce” prohibitions connected the import of goods produced utilizing forced labour.
In response, the Indian authorities has said it “remains engaged” with the U.S. authorities regarding this improvement arsenic good arsenic the finalisation of an Interim Agreement connected trade.
The bureau of the U.S. Trade Representative had, successful March this year, launched an probe nether Section 301 of the U.S. Trade Act of 1974 to look into whether its commercialized partners were taking capable steps to halt the import of goods that are made utilizing forced labour.
The latest tariff announcements, arsenic portion of this investigation, are not last arsenic yet. Countries, including India, tin taxable requests to instrumentality portion successful nationalist hearings by June 22, taxable written comments by July 6, and enactment successful the nationalist hearings connected July 7.
‘Will not tolerate’
According to commercialized experts, this was a instrumentality for the U.S. to enforce tariffs connected its imports aft the U.S. Supreme Court successful February struck down the reciprocal tariffs — including the 50% levied connected India — that had been imposed by U.S. President Donald Trump.
“The nonaccomplishment of our astir important trading partners to code the importation of goods made with forced labour is unacceptable,” U.S. Trade Representative (USTR) Jamieson Greer said connected June 2, arsenic portion of the announcement of the probe findings. “This creates a dynamic wherever American workers are forced to vie globally connected an uneven playing field. We volition nary longer tolerate this disparity,” helium added.
Findings connected India
According to the study released by the USTR, India is 1 of the 54 countries that were investigated and that were recovered to person “failed to enforce and efficaciously enforce” prohibitions connected the import of goods produced utilizing forced labour.
“The results of this probe bespeak that the acts, policies and practices of India related to the nonaccomplishment to enforce and efficaciously enforce a forced labour import prohibition are unreasonable and load oregon restrict U.S. commerce,” the study said.
As a result, the USTR has projected a tariff of 12.5% connected imports from these 54 countries. This puts India successful the aforesaid tariff bracket arsenic respective of its competitors, including Bangladesh, China, Malaysia, Thailand, and Vietnam.
The connection by the USTR besides includes a abstracted mechanics for textile and apparel products, nether which a definite measurement of imports from selected economies would beryllium allowed to participate the U.S. astatine little tariff rates.
According to Agneshwar Sen, commercialized argumentation person astatine EY India, the interaction of these tariffs connected India could beryllium multidimensional.
“In the adjacent term, exporters successful labour-intensive industries specified arsenic textiles, garments, carpets, leather products, and brassware could look astatine slightest an further 10% levy nether Section 301, adding to their existing tariff exposure,” Mr. Sen said.
“India should truthful taxable elaborate written representations by July 6 and enactment proactively successful the July 7 nationalist proceeding to situation these conclusions,” helium added.
‘Remain engaged with the U.S.’
“India remains engaged with the U.S. connected the substance arsenic a portion of Section 301 proceedings,” the Ministry of Commerce and Industry said successful a connection connected June 3. “India is besides parallelly engaged with the U.S. for finalisation of a model statement arsenic was announced connected February 2, 2026, and successful accordance with the associated connection released connected February 7, 2026,” helium added.
A negotiating squad from the U.S., led by Deputy USTR Brendan Lynch, is presently successful India connected a three-day sojourn to New Delhi that volition reason connected June 4.
According to the Ministry of Commerce and Industry, the intent of the travel is to “finalise the details” pertaining to the Interim Agreement betwixt the 2 countries and instrumentality guardant the negotiations connected a broader Bilateral Trade Agreement (BTA).
According to Mr. Sen, negotiating a committedness astatine adjacent a model level that ensures the lack of forced labour import restrictions would beryllium a strategically invaluable result for India.
Tariffs by immoderate means
According to commercialized experts, the Section 301 investigations are simultaneously a unit maneuver to propulsion countries similar India to determination up with a commercialized woody with the U.S. and besides a means to enforce tariffs connected imports into the U.S. by 1 means oregon another.
“Global Trade Research Initiative (GTRI) views the 12.5% tariffs arsenic portion of a broader effort by Washington to summation unit connected India done Section 301 investigations and tariffs,” GTRI said successful a note. “India should beryllium prepared for further Section 301 tariffs successful areas specified arsenic excess capacity.”
GTRI added that India should dainty the BTA negotiations and the Section 301 investigations arsenic abstracted matters, noting that the rationale for the BTA has disappeared pursuing the U.S. Supreme Court’s February 20 ruling striking down the reciprocal tariff framework.
“The projected BTA present appears progressively one-sided, with India being asked to marque important concessions portion receiving nary benefits successful return,” GTRI added. “India should reassess its information and see stepping distant from the BTA, arsenic Malaysia has done,” the commercialized assemblage said.
Mr. Sen further explained that the U.S. medication has been nether expanding unit to find an alternate to the 10% impermanent tariff it had introduced nether Section 122 of the Trade Act connected balance-of-payments grounds aft the Supreme Court had struck down the reciprocal tariffs.
“That justification has been viewed arsenic legally fragile by the U.S. Court of International Trade and perchance inconsistent with WTO norms,” Mr. Sen said. “In this context, the ‘forced labour’ attack provides a comparatively stronger ineligible ground to sustain, oregon adjacent raise, equivalent tariff levels,” helium added.
