India has urged the U.S. Trade Representative (USTR) to reconsider proposed additional tariffs of 12.5% on Indian imports under a Section 301 investigation into forced labour, according to a report by Economic Times. The USTR launched the probe on March 11 and 12, 2026, covering 60 economies over concerns related to forced labour and excess industrial capacity. On June 3, 2026, the USTR issued findings and proposed tariffs on imports from 54 economies. Public hearings on the proposed measures were held on July 7, 2026, and the USTR will consider comments before a final decision.
Proposed Tariff Rates
The USTR's proposal includes a 10% tariff on imports from Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan. A 12.5% tariff is proposed on imports from 48 other economies, including India and China. The following table summarises the proposed tariff structure:
| Tariff Rate | Economies |
|---|---|
| 10% | Canada, Ecuador, European Union, Indonesia, Mexico, Pakistan |
| 12.5% | 48 other economies including India and China |
India's Response and Arguments
In its response to the USTR's findings, India stated that the USTR has neither identified nor engaged with the discrete elements of Section 301 of the Trade Act of 1974 that would amount to an unreasonable act, policy, or practice for any country, including India. India further argued that the USTR did not undertake an economy-specific analysis of laws and practices across the 60 investigated economies, instead issuing a sweeping determination that all approaches are inadequate without considering specific measures implemented.
"India submits that a mere absence of a forced labour import prohibition, without meeting the evidentiary basis of other statutory requirements, cannot be construed as 'unreasonable' within the meaning of Section 301 of the Act," the country stated.
India also highlighted the lack of evidence linking its exports to forced labour:
"In relation to India, there is inadequate and insufficient evidence that the lack of forced labour import ban causes an alleged unfair comparative advantage to the detriment of the US industry. Evidence across sectors of major exports of India to the US does not suggest any linkage with forced labour inputs."
Next Steps
The USTR will consider all comments and testimony received from the July 7 public hearings before making a final determination on the proposed tariffs. Importers and exporters should monitor the USTR's decision, which could affect trade flows from the 54 economies subject to the proposed duties.
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