US proposes 12.5% tariff on India over forced labour concerns; trade talks continue

The United States has proposed additional tariffs of up to 12.5% on imports from India and several other countries after concluding a trade investigation related to forced labour concerns. The proposal was announced by the Office of the United States Trade Representative under Section 301 of the US Trade Act of 1974. No final decision has been taken, and the proposal remains subject to further review, public comments and hearings.

According to the findings, India is among 54 economies that the United States says have failed to impose and effectively enforce prohibitions on the importation of goods produced wholly or partly using forced labour. Under the proposal, countries that have not adopted or enforced such restrictions could face tariffs of 12.5%, while six economies that have established legal prohibitions but were found ineffective in enforcement could face tariffs of 10%.

The proposal comes as India and the United States continue negotiations on a broader trade agreement. Officials from both countries are holding discussions from June 2 to June 4. The Commerce and Industry Ministry stated that India remains engaged with the United States on matters related to the Section 301 proceedings while simultaneously working toward finalisation of a framework trade agreement announced earlier this year.

The investigations were launched in March 2026 and covered economies accounting for nearly all US imports. The United States Trade Representative examined whether governments had failed to prohibit or effectively restrict imports linked to forced labour. US Trade Representative Jamieson Greer stated that inadequate action by major trading partners on forced labour imports had created unfair conditions for American workers and businesses.

Apart from India and China, the list includes the European Union, Japan, South Korea, the United Kingdom, Vietnam, Bangladesh, Thailand, Canada, Mexico and several Gulf countries. The proposal also includes separate provisions for textile and apparel imports, under which limited quantities of certain products could enter the United States at lower tariff rates. Details regarding eligibility under that mechanism have not yet been released.

The proposed tariffs are not expected to take effect immediately. Requests to participate in public hearings can be submitted until June 22, written comments will be accepted until July 6, and public hearings are scheduled for July 7. The United States Trade Representative will review all submissions before deciding whether to implement the proposed measures. India has stated that the proposed tariffs are not final and that discussions on the issue remain ongoing.