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US Proposes Tariffs of Up to 12.5 Percent on India Over Forced Labour Enforcement Concerns
The United States Trade Representative has proposed additional tariffs of up to 12.5% on imports from India and 59 other economies following Section 301 investigations into forced labour-related trade enforcement. The move comes amid ongoing India-US trade negotiations and could have implications for bilateral trade if implemented.
By Finblage Editorial Desk
9:19 am
3 June 2026
The United States Trade Representative (USTR) has proposed imposing additional tariffs ranging from 10% to 12.5% on imports from India and 59 other economies after concluding that these countries have not adequately imposed or enforced restrictions on goods produced through forced labour. The proposal follows a series of Section 301 investigations initiated earlier this year under the Trade Act of 1974.
According to the USTR, the investigations examined whether the failure of these economies to prohibit and effectively enforce bans on imports made using forced labour constituted an unreasonable or discriminatory practice that burdens or restricts US commerce. The agency argued that inadequate enforcement allows products benefiting from lower labour costs to compete unfairly with American businesses and workers.
India has been named among the economies identified in the investigation. The proposed duties are not yet final and will be subject to further review, consultations, and public feedback before any implementation decision is made. The tariff rates under consideration vary across countries and could reach as high as 12.5% in certain cases.
The development comes at a sensitive time, with India and the United States currently engaged in discussions to finalize an interim trade agreement. Commerce Minister Piyush Goyal recently indicated that substantial portions of the proposed bilateral trade pact had already been agreed upon, with negotiations continuing on remaining issues.
The Section 301 investigations were launched by the USTR in March 2026 and cover 60 major US trading partners. The investigations focus specifically on whether countries maintain and enforce import restrictions on goods produced with forced labour, rather than on the use of forced labour within domestic production systems.
If implemented, the proposed tariffs could affect trade flows between the United States and several major exporting nations. However, industry observers note that the final outcome will depend on consultations, diplomatic engagement, and the broader direction of US trade policy.
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