Washington: India will face a lower 10 percent tariff under the United States’ new Section 301 action on forced labour imports after Washington concluded that New Delhi had adopted measures to prohibit the entry of goods produced using forced labour during the course of the investigation.
The Office of the US Trade Representative (USTR) announced that the Trump administration will impose tariffs on imports from 60 economies that were found to have failed to establish or effectively enforce bans on products linked to forced labour.
The new tariffs came into effect on July 24 and range between 10 percent and 12.5 percent, depending on the status of each country’s forced labour import regulations.
India Placed in Lower Tariff Category
India is among 17 countries that will face the lower 10 percent tariff, alongside Bangladesh, Canada, Indonesia, Malaysia, Mexico, Pakistan, Sri Lanka and the United Kingdom.
According to the USTR, India moved into this category after adopting a forced labour import prohibition following the publication of the agency’s proposed action in June.
The US said the move was aimed at encouraging trading partners to strengthen measures against forced labour and ensure fairer global supply chains.
US Trade Representative Jamieson Greer said the action was necessary to address both human rights concerns and trade distortions caused by forced labour practices.
60 Economies Investigated Under Section 301
The latest tariff decision follows investigations launched on March 12 into 60 economies over concerns that they were not adequately preventing imports produced through forced labour.
The investigation process included:
- Two rounds of public hearings
- Consultations with more than 45 governments
- Over 2,100 public comments
- Testimony from more than 100 witnesses
The USTR said it determined on June 2 that the policies and practices of all 60 economies were “unreasonable” and affected US trade interests, making them actionable under Section 301 of the Trade Act of 1974.
China, Australia and Others Face Higher Tariff
While India received a lower tariff rate, several major economies including China, Australia, Brazil, Saudi Arabia, the UAE, Vietnam and South Africa will face a higher 12.5 per cent tariff.
The European Union, Japan, South Korea, Switzerland and Taiwan will be covered under a separate formula where tariffs will apply after adjusting existing Most-Favoured-Nation duty rates.
Exemptions Announced for Key Products
The USTR also announced broad exemptions for certain products, including critical raw materials, pharmaceuticals, semiconductor manufacturing equipment and other goods where tariffs could significantly impact supply chains.
The agency said additional tariff-rate quotas will be developed for countries including Bangladesh, Cambodia, Indonesia and Malaysia to encourage imports using US textile and cotton inputs.
The USTR said the action covers the top 60 US trading partners, accounting for approximately 99.4 per cent of US imports.
US Tightens Global Trade Rules on Forced Labour
Section 301 of the Trade Act gives the US Trade Representative authority to investigate and respond to foreign policies or practices considered harmful to American commerce.
The latest action is part of President Donald Trump’s broader effort to eliminate forced labour from global supply chains and push trading partners to adopt stronger import restrictions similar to those enforced by the United States.