A statement has come from the government after the American tariff threat. Giving information, the government said that India is in touch with the US regarding the investigation under Section 301 regarding concerns related to bonded labor and excess industrial capacity. India is also in talks with America to finalize an interim trade agreement.
On March 11-12, 2026, the Office of the US Trade Representative (USTR) initiated an investigation under Section 301 against 60 countries on issues related to forced labor and excess industrial capacity. On June 2, USTR released the findings of its investigation related to forced labor and proposed imposing additional duties on imports from 60 countries.
The proposal includes a 10 percent duty on imports from Canada, Ecuador, the European Union, Indonesia, Mexico and Pakistan, while a 12.5 percent duty on 54 other economies including India and China. Pakistan and Indonesia are India’s competitors in the field of trade. This measure is currently in the proposal stage and has not been finalized.
Statement from Commerce Ministry
Commerce Ministry said that India is in touch with America regarding Section-301 proceedings. India is also in talks with the US to finalize the agreement as per the framework of the agreement announced on February 2, 2026 and the joint statement issued on February 7, 2026.
It said that products covered under Section 232 (regional) duty and some other items have been kept out of these proposed duties. A special system has been proposed for textile and apparel products, under which a certain quantity of imports from selected countries could be allowed to enter the US at reduced duty rates.
The Commerce Ministry said that according to the report, the proposed tariffs are not yet final and stakeholders can apply to participate in the public hearing till June 22, 2026. Written comments can be submitted till July 6, 2026. The public hearing will be held on July 7, 2026. USTR will consider the comments and arguments received before making a final decision on the proposed measures.
USTR proposal
USTR has proposed imposing an additional duty of 12.5 percent on countries it assesses have not taken or effectively implemented measures to prevent imports involving forced labor. Economies that have adopted and implemented such restrictions, or have promised to do so under mutual trade agreements, will face a lower proposed tariff rate of 10 percent. This development has come at a time when senior negotiators of India and America are discussing in New Delhi to finalize the framework of a bilateral trade agreement. Indian officials have indicated that obtaining relief from Section 301 measures and securing tariff concessions equal to or better than those of competing economies remain key priorities in these negotiations.
The government had expressed objection
According to earlier reports, India had objected to the allegations based on the forced labor investigation and urged Washington to resolve the matter within the ongoing trade negotiations rather than through unilateral trade measures. Section 301 of the US Trade Act gives USTR the authority to investigate policies and practices of foreign governments that it deems unfair or discriminatory and that burden US trade. Following such investigations, Washington could impose tariffs or other trade restrictions as a measure. These proposed measures are part of broader US efforts to restart trade actions and tariff regimes for a particular country. However, these proposals will be consulted upon and further reviewed before any final decision is taken.
Leave a Reply