US cuts India tariff to 10 per cent after forced labour ban
The United States has imposed a 10 per cent tariff on Indian goods under its forced labour trade action. The lower rate reflects Washington's recognition of India's policy change while keeping pressure on enforcement.
The United States has imposed a 10 per cent tariff on goods imported from India as part of a wider action against products made using forced labour. The new tariffs, announced under Section 301 of the Trade Act, apply to 60 economies and took effect at 12.01 am on Friday.
India had earlier been placed among countries facing a proposed 12.5 per cent levy, but the US reduced the rate after taking note of New Delhi's amendment to its foreign trade policy to prohibit imports of goods produced using forced labour. On June 14, India amended its policy to introduce that prohibition.
In a memorandum issued on Thursday, US President Donald Trump said, "As a result of these actions, the Trade Representative has advised me that the goods of these economies should be tariffed at the 10 per cent rate to further encourage these economies to effectively enforce such prohibitions." US Trade Representative Jamieson Greer announced the tariffs a day before a temporary 10 per cent import tax on all countries was due to expire.
The USTR said Greer had taken the final action at Trump's direction under Section 301 of the Trade Act of 1974, imposing tariffs on 60 economies for their failure to impose and effectively enforce a ban on the import of goods made with forced labour. Greer said, "The action will begin to correct what is both a human rights abuse and a distortive trade practice to improve the welfare of workers everywhere." The tariffs will not apply to raw materials that would lead to a shortage in domestic supply, products that would cause economy-wide disruption, or products that cannot be produced or grown in sufficient quantities in the US.
According to the US announcement, of the 60 countries facing the tariffs, 17, including India, Canada, the UK, Bangladesh and Pakistan, will face the 10 per cent rate, while the remaining 43 will face 12.5 per cent. The US also said countries that do not have laws barring goods produced using forced labour, such as China, the UK and Japan, would face 12.5 per cent tariffs.
The latest action comes after the US Supreme Court in February struck down the president's earlier "Liberation Day" tariffs introduced in April 2025, as well as last year's reciprocal tariffs imposed using emergency powers. The Trump administration then imposed 10 per cent tariffs on all countries, and those were due to expire on Friday. A Federal Note on the latest decision specifically referred to India's adoption of a forced labour import prohibition after the proposed tariffs were unveiled in June.
India has contested both investigations initiated by the USTR and has said these issues can be discussed as part of the bilateral trade agreement currently under discussion. "A reduction in the tariff from 12.5 per cent to 10 per cent is modest in percentage points but significant in signalling. It suggests that Washington is willing to calibrate enforcement while preserving the strategic trajectory of the India-US economic partnership," Abhik Sengupta, a programme officer with an industry body in Washington, said.
The US is India's second-largest trade partner and the biggest destination for its exports. According to commerce department data, bilateral goods trade in 2025 was nearly USD 141 billion, with India's exports valued at USD 87.3 billion. The latest US move leaves India subject to the lower of the two new tariff rates after Washington took note of New Delhi's policy change on forced labour imports.
With PTI Inputs
The United States has imposed a 10 per cent tariff on goods imported from India as part of a wider action against products made using forced labour. The new tariffs, announced under Section 301 of the Trade Act, apply to 60 economies and took effect at 12.01 am on Friday.
India had earlier been placed among countries facing a proposed 12.5 per cent levy, but the US reduced the rate after taking note of New Delhi's amendment to its foreign trade policy to prohibit imports of goods produced using forced labour. On June 14, India amended its policy to introduce that prohibition.
In a memorandum issued on Thursday, US President Donald Trump said, "As a result of these actions, the Trade Representative has advised me that the goods of these economies should be tariffed at the 10 per cent rate to further encourage these economies to effectively enforce such prohibitions." US Trade Representative Jamieson Greer announced the tariffs a day before a temporary 10 per cent import tax on all countries was due to expire.
The USTR said Greer had taken the final action at Trump's direction under Section 301 of the Trade Act of 1974, imposing tariffs on 60 economies for their failure to impose and effectively enforce a ban on the import of goods made with forced labour. Greer said, "The action will begin to correct what is both a human rights abuse and a distortive trade practice to improve the welfare of workers everywhere." The tariffs will not apply to raw materials that would lead to a shortage in domestic supply, products that would cause economy-wide disruption, or products that cannot be produced or grown in sufficient quantities in the US.
According to the US announcement, of the 60 countries facing the tariffs, 17, including India, Canada, the UK, Bangladesh and Pakistan, will face the 10 per cent rate, while the remaining 43 will face 12.5 per cent. The US also said countries that do not have laws barring goods produced using forced labour, such as China, the UK and Japan, would face 12.5 per cent tariffs.
The latest action comes after the US Supreme Court in February struck down the president's earlier "Liberation Day" tariffs introduced in April 2025, as well as last year's reciprocal tariffs imposed using emergency powers. The Trump administration then imposed 10 per cent tariffs on all countries, and those were due to expire on Friday. A Federal Note on the latest decision specifically referred to India's adoption of a forced labour import prohibition after the proposed tariffs were unveiled in June.
India has contested both investigations initiated by the USTR and has said these issues can be discussed as part of the bilateral trade agreement currently under discussion. "A reduction in the tariff from 12.5 per cent to 10 per cent is modest in percentage points but significant in signalling. It suggests that Washington is willing to calibrate enforcement while preserving the strategic trajectory of the India-US economic partnership," Abhik Sengupta, a programme officer with an industry body in Washington, said.
The US is India's second-largest trade partner and the biggest destination for its exports. According to commerce department data, bilateral goods trade in 2025 was nearly USD 141 billion, with India's exports valued at USD 87.3 billion. The latest US move leaves India subject to the lower of the two new tariff rates after Washington took note of New Delhi's policy change on forced labour imports.
With PTI Inputs
The United States has imposed a 10 per cent tariff on goods imported from India as part of a wider action against products made using forced labour. The new tariffs, announced under Section 301 of the Trade Act, apply to 60 economies and took effect at 12.01 am on Friday.
India had earlier been placed among countries facing a proposed 12.5 per cent levy, but the US reduced the rate after taking note of New Delhi's amendment to its foreign trade policy to prohibit imports of goods produced using forced labour. On June 14, India amended its policy to introduce that prohibition.
In a memorandum issued on Thursday, US President Donald Trump said, "As a result of these actions, the Trade Representative has advised me that the goods of these economies should be tariffed at the 10 per cent rate to further encourage these economies to effectively enforce such prohibitions." US Trade Representative Jamieson Greer announced the tariffs a day before a temporary 10 per cent import tax on all countries was due to expire.
The USTR said Greer had taken the final action at Trump's direction under Section 301 of the Trade Act of 1974, imposing tariffs on 60 economies for their failure to impose and effectively enforce a ban on the import of goods made with forced labour. Greer said, "The action will begin to correct what is both a human rights abuse and a distortive trade practice to improve the welfare of workers everywhere." The tariffs will not apply to raw materials that would lead to a shortage in domestic supply, products that would cause economy-wide disruption, or products that cannot be produced or grown in sufficient quantities in the US.
According to the US announcement, of the 60 countries facing the tariffs, 17, including India, Canada, the UK, Bangladesh and Pakistan, will face the 10 per cent rate, while the remaining 43 will face 12.5 per cent. The US also said countries that do not have laws barring goods produced using forced labour, such as China, the UK and Japan, would face 12.5 per cent tariffs.
The latest action comes after the US Supreme Court in February struck down the president's earlier "Liberation Day" tariffs introduced in April 2025, as well as last year's reciprocal tariffs imposed using emergency powers. The Trump administration then imposed 10 per cent tariffs on all countries, and those were due to expire on Friday. A Federal Note on the latest decision specifically referred to India's adoption of a forced labour import prohibition after the proposed tariffs were unveiled in June.
India has contested both investigations initiated by the USTR and has said these issues can be discussed as part of the bilateral trade agreement currently under discussion. "A reduction in the tariff from 12.5 per cent to 10 per cent is modest in percentage points but significant in signalling. It suggests that Washington is willing to calibrate enforcement while preserving the strategic trajectory of the India-US economic partnership," Abhik Sengupta, a programme officer with an industry body in Washington, said.
The US is India's second-largest trade partner and the biggest destination for its exports. According to commerce department data, bilateral goods trade in 2025 was nearly USD 141 billion, with India's exports valued at USD 87.3 billion. The latest US move leaves India subject to the lower of the two new tariff rates after Washington took note of New Delhi's policy change on forced labour imports.
With PTI Inputs
