The United States has imposed a 10% tariff on goods imported from India and 16 other countries as part of efforts to combat the use of forced labor in the production of such goods.
Tariff Changes Based on Policy
Last month, when the US proposed tariffs under Section 301 of the Trade Act, India was included in the group of countries subject to a 12.5% duty. However, Washington took into account an amendment made by New Delhi to its foreign trade policy, which prohibits the import of goods produced using forced labor.
In a memorandum on the matter, US President Donald Trump stated on Thursday: 'As a result of these actions, the Trade Representative advised me that goods from these economies should be subject to a 10 percent tariff to further incentivize these economies to effectively ensure compliance with such prohibitions.'
Announcement of New Duties
US Trade Representative Jamieson Green announced the imposition of new tariffs on 60 countries under Section 301 of the Trade Act on Thursday, one day before the expiration of additional 10% duties for all countries.
Countries without laws prohibiting goods produced using forced labor, such as China, the UK, and Japan, will face 12.5% tariffs. Of the 60 countries subject to tariffs, the 10% rate applies to 17 countries, including India, Canada, the UK, Bangladesh, and Pakistan. The remaining 43 countries must pay 12.5%.
Exemptions and Basis for Measures
The USTR statement clarified that Green took final action under the direction of President Donald Trump in accordance with Section 301 of the Trade Act of 1974, imposing tariffs on 60 economies due to their inability to adopt and effectively enforce a ban on the import of goods produced with forced labor.
The new tariffs take effect on Friday at 00:01, coinciding with the expiration of the temporary 10% import tax. This measure was introduced following a Supreme Court ruling in February that invalidated the 'Freedom Day' tariffs imposed by the president in April 2025.
According to Green, this action aims to correct both human rights abuses and distorting trade practices to improve worker welfare globally.
Context and Stakeholder Reaction
The Federal Register noted India's adoption of the ban on importing goods produced with forced labor after the proposed tariffs were published in June. Specifically, on June 14, India amended its foreign trade policy to prohibit the import of goods created through forced labor.
The Trump administration initiated two investigations after the US Supreme Court rejected last year's 'reciprocal tariffs,' which used emergency powers as illegal. The administration responded by imposing 10% tariffs on all countries, which expire on Friday.
Abhik Sengupta, an industry organization employee, noted that 'the reduction of the tariff from 12.5 percent to 10 percent is modest in percentage points but significant in terms of signal. It indicates Washington's readiness to calibrate the application of measures while maintaining the strategic trajectory of economic partnership between India and the US.'
India challenges both the investigations initiated by the USTR and insists that these issues can be discussed within the framework of a bilateral trade agreement currently under discussion. The US is India's second-largest trading partner and its largest export destination. According to trade department data, trade between the two countries was valued at nearly $141 billion in 2025, with India's exports amounting to $87.3 billion.
