The United States Trade Representative (USTR) has proposed imposing additional tariffs on 60 countries, including India, due to concerns over forced labour in global supply chains. This proposal, announced on June 3, 2026, comes amid ongoing trade negotiations between the US and India.
Section 301 Investigation
The proposal follows an investigation under Section 301 of the US Trade Act of 1974, which examined whether countries allow goods produced with forced labour to enter global supply chains. The investigation, launched in March 2026, covered economies accounting for 99.4% of US imports.
"The acts, policies, and practices of India related to the failure to impose and effectively enforce a forced labor import prohibition are unreasonable and burden or restrict US commerce," stated the USTR report.
Impact on India
The USTR report highlights India's reliance on imported inputs from China, suspected of being produced using forced labour. Key sectors affected include:
- Solar panels: Exports to the US often use Chinese polysilicon or solar cells.
- Electronics: Manufacturing depends on Chinese components and sub-assemblies.
- Textiles and garments: Use of Chinese yarns and fabrics linked to Xinjiang cotton.
Proposed Tariffs
The USTR suggests imposing additional duties of 10% to 12.5% on imports from affected economies. This move could impact bilateral trade negotiations, as India and the US are currently engaged in a three-day round of trade talks in New Delhi.
| Country | Proposed Tariff Increase |
|---|---|
| India | 10% to 12.5% |
| Others | 10% to 12.5% |
Global Implications
The proposal affects 54 economies, with the USTR emphasizing the need for stricter enforcement of forced labour prohibitions. The focus is on products using imported inputs from China, particularly those linked to forced labour in Xinjiang.
The Global Trade Research Initiative (GTRI) notes that increased scrutiny on supply chains could lead to tighter traceability requirements for goods exported to the US.
