According to official data, the Indian government anticipates a softening of the tariffs proposed by the United States on Indian products under the Section 301 investigation, as the country issued a notification aimed at restricting the import of goods produced using forced labor.
Last month, the United States Trade Representative (USTR) proposed imposing an additional duty of 12.5 percent on goods from India and several other economies following an investigation conducted under Section 301 of the US Trade Act of 1974, concerning imports linked to forced labor. Within the same investigation, the USTR suggested a lower rate of 10 percent for several countries, including Pakistan, Indonesia, Mexico, and Canada, for implementing a 'partial regime' to prevent the entry of products manufactured using forced labor.
This week, the Indian government issued a corresponding notification to restrict the import of goods produced with forced labor. The Directorate General of Foreign Trade (DGFT) defined forced labor in its notification as 'any work or service extracted from any person under the threat of any penalty, and for which that person has not offered himself voluntarily, as defined in the International Labour Organization (ILO) Convention on Forced Labour.'
This notification brings India into compliance with the international standard on forced labor applied within the US. According to an official source quoted, New Delhi now expects a more favorable tariff outcome for Indian goods in the final USTR report on this investigation, which is expected to be published this month. Furthermore, the USTR has initiated another Section 301 investigation against India, alleging excess production capacity, the draft of which has not yet been released. This section of the US Trade Act allows Washington to conduct reviews and take action against trade practices it deems harmful to American commerce.
The US Section 301 investigations into India are viewed as a replacement for reciprocal tariffs imposed by the Donald Trump administration under the International Emergency Economic Powers Act (IEEPA) in April 2025. These tariffs were overturned by the US Supreme Court in February. Concurrently, India and the US continue negotiations on a trade agreement that is likely to resolve New Delhi's concerns regarding the US Section 301 investigations against India.
India's exports showed a growth of 15.5% in June, reaching a volume of $40.41 billion, while the trade deficit expanded to $30.43 billion.
For the reporting period from April to June, exports increased by 15.92%, amounting to $129.32 billion. Meanwhile, imports grew by 19.89%, reaching $216.18 billion.
In June, imports also increased by approximately 31%, reaching $70.84 billion. It is worth noting that gold imports in the first quarter of the current fiscal year reached $11.01 billion compared to $7.49 billion in the same period last year.
According to Commerce Minister Rajesh Agarwal, India's exports to West Asian countries increased by 7.29% in June, totaling $5 billion. Agarwal attributed the increase in incoming supplies to a higher level of imports of crude oil, electronics, machinery, and precious metals.
