The United States Trade Representative has proposed additional import duties of 12.5 per cent on India and 53 other countries over alleged failures to block goods produced by forced labour, marking a significant development in global trade policy that could reshape bilateral trade relationships.
The proposal, announced under Section 301 of the US Trade Act of 1974, stems from investigations launched in March 2026 against 60 countries accounting for 99.4 per cent of US imports. The USTR found that all 60 nations failed to impose legal prohibitions on forced labour imports or effectively enforce existing restrictions.
India joins China, Japan, South Korea, the United Kingdom, Vietnam, Bangladesh, and several Gulf economies in the higher 12.5 per cent tariff bracket, as these countries were found to have both failed to impose legal prohibitions and failed to effectively enforce restrictions on forced labour-linked goods. A separate lower tier of 10 per cent applies to Pakistan, Canada, the European Union, Mexico, Indonesia, and Ecuador, which have formal trade agreements committing to forced labour bans.
The proposed tariffs are not yet final and will undergo further review before implementation. Written comments are due by July 6, 2026, with public hearings scheduled for July 7, 2026. Stakeholders can submit requests to participate in public hearings by June 22, 2026. The USTR will consider all comments and testimony received before making a final determination on the measures.
The Indian government has reacted to the proposal, stating that both countries remain engaged in discussions over the claims while confirming further talks to finalise a trade deal. A Press Information Bureau statement issued on Wednesday, June 3, read that India remains engaged with the US on the matter as part of Section 301 proceedings and is parallelly engaged with the US for finalisation of a framework agreement announced on February 2, 2026.
The proposal includes a separate mechanism for textile and apparel imports, under which limited volumes of certain products could enter the United States at lower tariff rates from selected economies. Products covered under Section 232 tariffs and certain other products are excluded from these tariff proposals.
This announcement comes as formal India-US trade negotiations began on Tuesday, June 2, 2026, leading observers to view the move as potentially serving as a negotiating tool alongside legitimate labour concerns. If implemented, the tariffs could affect a broad range of imports entering the United States and create fresh uncertainty in global trade markets
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