US Imposes 10% Tariffs On India Over 'Forced Labour' Practices

The United States has imposed a 10% tariff on goods from India, Pakistan, Bangladesh, Cambodia, Sri Lanka, the UK and 11 other nations under Section 301 of the Trade Act over their failure to impose bans on imports made with forced labour.

The final 10% levy is lower than the 12.5% rate initially proposed in June. India amended its foreign trade policy on June 14, 2026, to prohibit imports of goods produced using forced labour.

"Based on the findings in the investigation of India, including India’s adoption of a forced labour import prohibition... and considering the public comments and testimony, the advice of the Section 301 Committee, as well as the advice of advisory committees, and in accordance with the specific direction of the President, the Trade Representative has determined to impose 10% tariffs on products of India, except...," US Trade Representative Jamieson Greer stated in its final report Friday.

Enforcing Labour Standards

Trading partners that committed to adopting and enforcing forced labour import prohibitions face a 10% tariff, whereas those failing to adopt a prohibition incur the higher 12.5% rate.

Cambodia, Guatemala, Honduras, India, Sri Lanka and Trinidad and Tobago committed to these prohibitions following government-to-government consultations.

Ten trading partners accepted the import ban. They integrated the restrictions into their Agreements on Reciprocal Trade, while other nations passed similar laws recently following the American investigations, the USTR said.

"I am encouraged by the trading partners who have moved quickly to adopt forced labour import prohibitions, and look forward to ensuring their effective enforcement," US Trade Representative said.

Greer added that the action will begin to correct "what is both a human rights abuse and distortive trade practice to improve the welfare of workers everywhere".

"The Trade Representative has determined, in accordance with the specific direction of the President that the tariff rate to be applied, and the scope of tariffs and exemptions are appropriate to obtain the elimination of the acts, policies, and practices determined to be actionable in the investigation," the final report stated.

Bilateral Trade Negotiations

The US Supreme Court dismissed previous "reciprocal tariffs" as illegal in February 2026 — a ruling that prompted the administration to apply temporary 10% tariffs expiring on July 24.

Washington separately initiated a probe in March 2026 alleging excess capacity in certain goods. The draft report on this excess capacity investigation remains pending.

Commerce Minister Piyush Goyal and Greer met last month to discuss Phase 1 of the Bilateral Trade Agreement (BTA). India and the US currently have a framework deal ready for the BTA.

India insists on maintaining a comparative advantage over its neighbours and competing countries in the final arrangement, and stated that the deal will cover all aspects of trade.