Washington DC/New Delhi (Gurpreet Singh): The United States has imposed a 10 per cent tariff on imports from India and more than a dozen other nations following a months-long Section 301 investigation into forced labour practices. New Delhi secured the lower 10 per cent rate—placing it alongside regional peers such as Pakistan, Sri Lanka, and Bangladesh—after initial proposals by Washington suggested a steeper 12.5 per cent levy. The new duties replace the temporary 10 per cent global tariff that expired this week and apply to 60 countries accounting for over 99 per cent of American imports. US Trade Representative Jamieson Greer stated that the action aims to address both human rights abuses and distortive trade practices while encouraging trading partners to effectively enforce bans on goods produced through forced labour.
The trade enforcement measure stems from Section 301 investigations initiated by the Trump administration to address unfair or discriminatory trade policies. Unlike short-term emergency tariffs, measures under Section 301 require formal investigations but carry no statutory rate ceiling or expiration date. During public consultations, Indian government representatives and industry groups defended the country’s regulatory framework, highlighting constitutional prohibitions against forced labour and recent trade policy updates aimed at restricting such imports. However, India continues to face a separate, ongoing Section 301 investigation concerning alleged excess manufacturing capacity.
The tariff announcement arrives as bilateral trade negotiations between Washington and New Delhi remain active. Both nations had previously discussed a framework to lower baseline duties on Indian exports from 50 per cent down to 18 per cent in exchange for expanded market access and significant purchases of American goods. While Indian officials noted that an 18 per cent tariff would maintain a competitive edge over neighbouring economies, a recent US Supreme Court ruling striking down earlier reciprocal tariffs has introduced fresh uncertainty. Trade experts warn that because competing exporters like Pakistan and Sri Lanka are not currently subject to the secondary excess capacity investigation, India’s overall relative tariff advantage could face additional pressure as final bilateral terms are finalized.
