Summary of this article
US has proposed an additional 12.5 per cent tariffs on India
India remains engaged in talks with US, says proposed tariffs not final
Amid ongoing trade talks between the US and India, the office of the United States Trade Representative (USTR) has proposed imposing additional tariffs of up to 12.5 per cent on imports from India and 59 other countries, escalating trade pressure on countries that Washington says have failed to adequately prevent the import of goods produced using forced labour. The proposal comes following a series of investigations conducted under Section 301 of the US Trade Act of 1974.
According to the USTR, the affected economies have not sufficiently enforced prohibitions on goods linked to forced labour, creating what it described as an uneven playing field for American workers and businesses. The proposed measures are part of the Trump administration’s effort to rebuild tariff tools after earlier emergency tariffs were struck down by the US Supreme Court earlier this year.
“The failure of our most important trading partners to address the importation of goods made with forced labour is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field,” US trade representative Jamieson Greer was reported as saying while setting out the proposal.
The proposed tariff structure differentiates between countries based on their existing policies. Economies that have adopted full or partial bans on imports tied to forced labour would face an additional 10 per cent tariff. Meanwhile, countries that the USTR believes have not implemented such prohibitions could be subject to a higher tariff of 12.5 per cent. India falls into the latter category, alongside countries such as China, Japan and Australia.
The USTR report stated that India has failed to impose and effectively enforce restrictions on imports produced through forced labour practices. US Trade Representative Jamieson Greer said governments that do not adequately address forced labour create unfair competition for American workers. The report also highlighted concerns about global supply chains and the movement of products linked to forced labour through intermediary countries.
The proposal arrives at a sensitive time, as India and the United States are engaged in negotiations aimed at finalising an interim trade agreement. Trade officials from both countries are currently holding discussions in New Delhi, with Section 301-related tariff concerns already featuring prominently in the talks. Analysts warn that the proposed duties could complicate efforts to reach a broader trade pact.
India’s Commerce Ministry has indicated that it remains engaged with US authorities on the issue and noted that the tariff proposal is still under review. “India remains engaged with the U.S. on the matter as a part of Section 301 proceedings. India is also parallelly engaged with the US for finalisation of a framework agreement as was announced on 2nd February 2026 and in accordance with the joint statement released on 7th February 2026," said the Ministry Of Commerce in a press statement.
The USTR has invited public comments until July 6 and plans to hold a hearing on July 7 before making a final decision. Several categories of goods, including pharmaceuticals, energy products and aircraft parts, are expected to be exempt from the proposed duties.
The proposed tariffs, if implemented, could have significant implications for global trade flows and for Indian exporters seeking greater access to the US market, particularly at a time when both nations are attempting to deepen their economic partnership.
