NEW DELHI, June 3 - The United States has put forward a proposal to add a 12.5% tariff on imports from India, asserting that India is among a group of economies that have not taken adequate steps to prevent the inflow of goods produced with forced labour. The proposal was released by the office of the U.S. Trade Representative (USTR) during the second day of a three-day round of trade talks taking place in New Delhi.
The USTR's 92-page report stated that India "has failed to impose and effectively enforce a forced labour import prohibition," and characterized New Delhi's policies as unreasonable and burdensome to U.S. commerce. The report appears amid high-level discussions between Indian trade officials and a U.S. delegation led by Assistant USTR Brendan Lynch.
U.S. Trade Representative Jamieson Greer underscored the USTR's position in a statement included with the report: "The failure of our most important trading partners to address the importation of goods made with forced labour is unacceptable," he said. "This creates a dynamic where American workers are forced to compete globally on an unlevel playing field."
According to the USTR, the proposal is part of the outcome of a Section 301 unfair trade practices investigation, an effort that seeks to rebuild emergency tariffs that were nullified by a decision of the U.S. Supreme Court in February. The report categorized a range of countries in different ways: it named India among 60 economies cited for failing to curb imports made with forced labour, and it placed India among 54 economies that lack a forced-labour import prohibition and therefore would face the higher proposed duty.
In contrast, six other jurisdictions - Canada, Ecuador, the European Union, Indonesia, Mexico and Pakistan - were identified as having forced-labour import prohibitions in law but as failing to enforce them effectively; those economies would face a lower proposed tariff of 10% under the USTR framework.
Commenting on the report, Ajay Srivastava, founder of the Global Trade Research Initiative, suggested the finding could be contested. He noted that the USTR probe addressed whether India blocked imports connected to forced labour elsewhere, rather than investigating forced labour within Indian exports. "The proposed tariffs are viewed as part of broader U.S. pressure tactics, and India should treat Section 301 actions and the India–U.S. bilateral trade agreement negotiations separately," he said.
An Indian government source indicated that New Delhi intended to raise the Section 301 matter with the U.S. delegation led by Mr. Lynch and to pursue tariff relief as an element of the larger two-way trade negotiations.
The USTR's report also singled out India as an intermediary in cotton supply chains that include Chinese inputs associated with forced labour. India's commerce ministry did not immediately respond to a request for comment on the USTR's findings.
Context and implications
The USTR proposal comes in the midst of active bilateral negotiations and is framed as a corrective measure targeting imports linked to forced labour. The proposal's publication during talks in New Delhi introduces a parallel pressure point to the formal negotiation track, and the USTR has delineated differential tariff rates depending on whether countries are judged to have prohibitions on forced-labour imports and whether those prohibitions are enforced.
Given the USTR's characterization of policy shortfalls and the inclusion of India in lists of economies both failing to curb forced-labour imports and lacking statutory prohibitions, the proposal represents a potential trade-policy lever that could affect commerce flows should it be adopted.