US slaps 10% tariff on goods imported from India over forced labour concerns

The US has imposed a 10% tariff on goods imported from India and 16 other countries as part of a wider action against products made using forced labour.

On June 3, when the US had proposed tariffs under Section 301 of the Trade Act, India was bracketed among countries attracting 12.5% levies, but Washington took note of the amendment New Delhi made to its foreign trade policy prohibiting the import of goods produced using forced labour.

On July 14, India amended its policy to introduce that prohibition.

The government amended the foreign trade policy to prohibit the import of goods produced using forced labour, amid a US investigation into forced labour practices in 60 countries, including India.

“As a result of these actions, the Trade Representative has advised me that the goods of these economies should be tariffed at the 10% rate to further encourage these economies to effectively enforce such prohibitions,” US President Donald Trump said in a memorandum on the issue on Thursday, July 23.

US Trade Representative Jamieson Greer announced the new tariffs on 60 countries on Thursday, July 23, a day before the expiration of 10% additional levies on all countries.

Countries that do not have laws barring goods produced using forced labour – such as China, the United Kingdom and Japan — will face tariffs of 12.5%.

The forced labour tariffs will not apply to raw materials that would lead to unavailability of domestic supply; products that would cause economy-wide disruptions and on products that cannot be produced or grown in sufficient quantities in the US.

Of the 60 countries facing the tariffs, the 10% rate applies to 17 countries, including India, Canada, the UK, Bangladesh and Pakistan. The other 43 will have to bear 12.5%.

The USTR statement said that Greer had taken the final action, at President Trump's direction, under Section 301 of the Trade Act of 1974 by imposing tariffs on 60 economies for their failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labour.

The latest tariffs take effect at 12.01 am on Friday, July 24, just as a temporary 10% import tax expires. That measure was put in place following a February Supreme Court decision that invalidated the president's “Liberation Day” tariffs introduced in April 2025.

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, Greer said in a statement here.

A Federal Note in this regard took note of India's adoption of a forced labour import prohibition after the unveiling of the proposed tariffs in June, this year.

The Trump administration initiated the two investigations after the US Supreme Court, in February, dismissed last year's "reciprocal tariffs" using emergency powers as illegal.

After the US Supreme Court struck down the sweeping reciprocal tariffs (25% on India) in February, the Trump administration imposed a temporary 10% tariff on all countries for 150 days from February 24 that expires on Friday.

“A reduction in the tariff from 12.5% to 10% 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 here, said.

India has contested both the investigations initiated by the USTR and insisted that these issues can be discussed as part of the bilateral trade agreement that is under discussion.

The US is India's second-largest trade partner and the largest destination for exports. In 2025, bilateral goods trade was pegged at nearly USD 141 billion, with India's exports pegged at USD 87.3 billion, according to commerce department data.

According to a report in The Washington Post, the Trump administration is expected to introduce another set of tariffs within weeks that will apply to goods from nations that subsidise excess manufacturing capacity. Those government policies result in a flood of low-cost products on global markets that US companies can not match, officials said.