Global Trade Research Initiative (GTRI) has questioned the 10% U.S. Section 301 tariff on Indian exports, stating that the measure "lacks a credible factual basis" and that the United States has not produced evidence that India imports goods made with forced labour, according to a report by GTRI published on July 24, 2026.
Background of the Section 301 Tariff
The United States imposed a 10% tariff under Section 301 on Indian exports as part of a forced-labour investigation. GTRI noted that India had already amended its Foreign Trade Policy in June 2026 to prohibit imports produced using forced or compulsory labour, a move that helped reduce the proposed tariff on Indian exports to 10% from the initially proposed 12.5%.
Impact on Indian Exports
Despite the policy change, around 70% of India's exports to the U.S., including engineering goods, textiles and garments, chemicals, machinery, plastics, leather products, gems and jewellery, and furniture, will now attract the normal Most Favoured Nation (MFN) tariff in addition to the new 10% Section 301 duty.
| Export Category | Tariff Treatment |
|---|---|
| 70% of exports (engineering goods, textiles, garments, chemicals, machinery, plastics, leather, gems, jewellery, furniture) | MFN tariff + 10% Section 301 duty |
| 8% of exports (steel, aluminium, copper products, auto components) | Existing 25-50% Section 232 tariffs + MFN duties |
| Exempt products | Only MFN tariffs |
GTRI Analysis
GTRI argued that the tariff "appears to serve primarily as a mechanism to preserve the Trump administration's tariff wall after the expiry of the temporary Section 122 tariffs, rather than as a targeted response to a proven forced-labour problem involving India."
Exclusion from Textile TRQ
The report also pointed out that India has not been included in the textile and apparel tariff-rate quota (TRQ) exemption available to Bangladesh, Cambodia, Indonesia and Malaysia for specified exports using US-origin cotton and fibre.
Implications for Trade Policy
GTRI's questioning of the factual basis of the tariff underscores ongoing tensions in US-India trade relations. The US has not provided evidence linking Indian exports to forced labour, while India has proactively amended its trade policy to address such concerns. The tariff affects a wide range of Indian exports, and the exclusion from TRQ provisions may further disadvantage Indian textile exporters compared to competitors.
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