The United States has imposed a 10% tariff on goods imported from India and 16 other economies, citing concerns over the enforcement of measures against forced labour in supply chains. The new duties, announced by the Office of the U.S. Trade Representative (USTR) under Section 301 of the Trade Act of 1974, replace the temporary worldwide 10% tariff introduced earlier by President Donald Trump. U.S. officials said the move is intended to encourage stronger action against the production and import of goods linked to forced labour.
The tariffs follow a USTR investigation into around 60 economies, with Washington classifying countries into two categories. Seventeen economies, including India, Canada, the United Kingdom, Bangladesh and Pakistan, will face a 10% tariff, while 43 others will be subject to a 12.5% levy. The U.S. said countries that have laws against forced-labour imports but are considered to enforce them inadequately fall under the 10% category, whereas those lacking such legal provisions face the higher tariff. Several essential products, including oil, natural gas, fertilisers and goods covered under existing trade agreements, have been exempted from the new duties.
India has opposed the U.S. approach, maintaining that such issues should be resolved through the proposed bilateral trade agreement currently under negotiation between the two countries. The Indian government recently amended its Foreign Trade Policy to prohibit the import of goods produced using forced labour, a step that resulted in India being placed in the lower 10% tariff category instead of the initially proposed 12.5% rate. The U.S. has indicated that further trade measures under Section 301 may follow as investigations into global trade practices continue.
