- India
- Jul 25
US imposes 10% ‘forced labour’ tariffs on India
• The United States has imposed a 10 per cent tariff on goods imported from India and 16 other countries as part of its efforts to combat the use of forced labour in the production of such items.
• On March 12, The United States Trade Representative (USTR) initiated investigations related to failures to take action on forced labour in 60 economies, including India and the European Union, under Section 301(b) of the Trade Act of 1974.
• They examined whether these economies have taken sufficient steps to prohibit the importation of goods produced with forced labour and how the failure to eradicate these abhorrent practices impacts US workers and businesses.
• On June 3, when the US had proposed tariffs under Section 301 of the Trade Act, India was bracketed among countries attracting 12.5 per cent levies.
• Later, Washington took note of the amendment New Delhi made to its foreign trade policy prohibiting the import of goods produced using forced labour.
• On July 14, India amended its policy to introduce that prohibition.
• Of the 60 countries facing the tariffs, the 10 per cent rate applies to 17 countries, including India, Canada, the UK, Bangladesh and Pakistan.
• Countries that do not have laws barring goods produced using forced labour such as China, the United Kingdom and Japan will face tariffs of 12.5 per cent.
• India remained closely engaged with USTR throughout the investigation via detailed written submissions and in-person consultations, including participation in public hearings.
• India has been placed in the lower tier of additional tariffs under the final measures, providing a relative advantage to Indian exports in key sectors.
• A substantial share of India's exports to the United States, which currently attract zero additional duties, such as generic pharmaceuticals, smartphones and certain other specified products, continue to remain outside the scope of the additional 10 per cent duty.
Section 301 of the Trade Act of 1974
• Section 301 may be used to respond to unjustifiable, unreasonable, or discriminatory foreign government practices that burden or restrict US commerce.
• The United States Trade Representative may self-initiate an investigation under Section 301.
• An investigation under Section 301(b) of the Trade Act examines whether the acts, policies, or practices of a foreign country are unreasonable or discriminatory and burden or restrict US commerce.
• After considering the advice of the inter-agency Section 301 Committee, and consulting with appropriate advisory committees, the USTR has initiated these investigations.
• Upon initiation of an investigation, the USTR must seek consultations with the economies whose acts, policies, or practices are under investigation.