India is continuing discussions with the US on proposed additional tariffs under Section 301 while simultaneously negotiating an interim bilateral trade agreement.
The USTR has proposed tariffs of up to 12.5% on India and 53 other countries following investigations into alleged unfair trade practices, including forced labour concerns.
The tariff proposals remain under public consultation, with a final decision expected in June or July, while both countries move closer to finalising the trade pact.
India Engages US on Proposed 12.5% Section 301 Tariffs as Trade Talks Advance
India and the United States are continuing discussions on proposed Section 301 tariffs even as both sides move closer to finalising an interim bilateral trade agreement
India, US Put Interim Trade Talks on Hold Amid Trump's 15% Tariff Move
Summary
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India continues to engage with the United States on the proposed additional tariffs under Section 301, the Ministry of Commerce and Industry said in a statement on Wednesday.
New Delhi is simultaneously negotiating with Washington to finalise the interim Bilateral Trade Agreement (BTA).
Senior US officials are in New Delhi until June 4 to discuss the agreement, while US Trade Representative Jamieson Greer is expected to visit India once the deal is finalised.
Union Commerce Minister Piyush Goyal recently stated that the agreement is “99% done” and is expected to be signed soon.
The ministry's statement on tariff discussions comes after the Office of the United States Trade Representative (USTR) proposed imposing additional tariffs of 10-12.5% on India and 53 other countries.
The proposal followed investigations under Section 301, which found that several countries were allegedly engaging in unfair trade practices, including the use of forced labour.
The proposed tariffs will not take effect immediately, as they are subject to public consultations and other procedural requirements in the United States.
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According to a report by Moneycontrol, products already covered under Section 232 tariffs, along with certain other goods, have been excluded from the latest tariff proposals.
The report also noted that a separate mechanism has been proposed to allow specified quantities of textile and apparel exports to enter the US at lower tariff rates.
The tariff proposal is currently in the consultation stage, with a final decision expected in June or July.
Why Was Section 301 Invoked?
The Trump administration launched investigations under Section 301 in early March after President Donald Trump's "Liberation Day" tariffs, also known as reciprocal tariffs, were struck down by the US Supreme Court.
Following the legal setback, the White House explored alternative mechanisms to impose tariffs. One such measure was introduced under Section 122 of the Trade Act of 1974, which allows the US President to impose a blanket tariff of up to 15% for a period of 150 days.
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Soon after, the USTR launched Section 301 investigations into major US trading partners. Section 301 of the Trade Act of 1974 authorises the USTR to investigate foreign trade policies and practices that may harm US commerce.
If a country's practices are found to be unfair, unreasonable, or discriminatory, the US administration can impose retaliatory trade measures, including tariffs.
The current investigation concluded that several countries, including India and China, had engaged in practices deemed unfair by Washington, including alleged failures to address forced labour concerns. As a result, the USTR proposed an additional tariff of up to 12.5% on affected countries.