U.S. moots 12.5% tariff on India for failure to enforce ‘forced labour’ regulations

4 JUNE 2026

The U.S. government has proposed to levy a tariff of 12.5% on imports from 54 countries, including India, that it says have “failed to impose and effectively enforce” prohibitions on the import of goods produced using forced labour.
In response, the Indian government has said it “remains engaged” with the U.S. government regarding this development as well as the finalisation of an Interim Agreement on trade.
The office of the U.S. Trade Representative (USTR) had, in March 2026, launched an investigation under Section 301 of the U.S. Trade Act of 1974 to look into whether its trade partners were taking enough steps to stop the import of goods made using forced labour.
The latest tariff announcements, as part of this investigation, are not final as yet.
Countries, including India, can submit requests to take part in public hearings by June 22, submit written comments by July 6, and participate in the public hearings on July 7.
Tool to impose tariff
According to trade experts, investigations under Section 301 was seen as a tool for the U.S. to impose tariffs on its imports after the country’s Supreme Court in February struck down the reciprocal tariffs — including the 50% levied on India — that had been imposed by U.S. President Donald Trump.
The proposed tariffs put India in the same tariff bracket as several of its competitors, including Bangladesh, China, Malaysia, Thailand, and Vietnam.