India expects relief in US Section 301 tariff after forced labour curbs

India expects lower US tariffs after aligning forced labour import rules with global standards amid ongoing Section 301 trade investigations

The Indian government expects some easing in the United States' (US) tariff proposal on Indian goods under Section 301 investigation after it issued a notification to curb the import of goods whose manufacturing involves forced labour, an official said on Wednesday. 

 

“There should be some relief in that (tariff following Section 301 probe),” the official said without quantifying the expected tariff revision. 

 

The Office of the US Trade Representative (USTR) last month proposed 12.5 per cent additional duty on India and several other economies after an investigation under Section 301 of the US Trade Act, 1974, on imports linked to forced labour. 

 

 

Under the same probe, the USTR has proposed a lower tariff of 10 per cent on a handful of economies, including Pakistan, Indonesia, Mexico and Canada, among others, for imposing a “partial regime” to prevent the import of goods made with forced labour.

 

The Indian government this week issued a notification to curb the import of goods manufactured using forced labour. The Directorate General of Foreign Trade (DGFT) in its notification defined forced labour as “all work or service which is extracted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily, as defined under the International Labour Organization (ILO) Forced Labour Convention”.

 

The notification aligns India with the international benchmark on forced labour that is invoked domestically by the US. New Delhi now expects a better tariff outcome for Indian goods in the USTR's final report on the probe, which is likely to be released this month, according to the official quoted above. 

 

The USTR has initiated another probe against India under Section 301, alleging excess capacity, whose draft report is yet to be released. This section of the US Trade Act allows Washington to probe and act against trade practices that it considers harmful to US commerce. 

 

The US’ Section 301 investigations against India are being viewed as a substitute for the reciprocal tariffs imposed by the Donald Trump administration under the International Emergency Economic Powers Act (IEEPA) in April 2025. Those tariffs were struck down by the US Supreme Court in February.

 

At the same time, India and the US remain engaged in negotiations for a trade deal, which is likely to address New Delhi’s concerns over Washington’s Section 301 investigations against India.