US Imposes 10% Section 301 Tariff on Imports from India Following Forced Labour Probe

New Section 301 duties replace the temporary 10% tariff, while exporters indicate the overall tariff burden on most Indian goods remains largely unchanged.

The United States has levied a 10% tariff on goods imported from India and 160 other countries, citing their failure to prohibit imports produced with forced labour.

The measure has been introduced under Section 301 of the US Trade Act and replaces the temporary 10% tariff that had been implemented earlier this year by US President Donald Trump, which expired at midnight.

The new duty is lower than the 12.5% tariff proposed by the United States in June as part of a broader Section 301 investigation.

Along with India, Pakistan, Bangladesh, Cambodia, Sri Lanka, and the United Kingdom have also been subjected to a 10% tariff, while China and Vietnam face 12.5% tariffs.

India did not receive the textile and apparel tariff-rate quota (TRQ) exemption, which applies to specified export volumes of textile and apparel products from Bangladesh, Cambodia, Indonesia, and Malaysia that use US-origin cotton and fibre. According to exporters, Indian exporters have expressed concern over Washington's decision.

Despite the latest announcement, exporters indicated that the overall tariff burden on most Indian exports is expected to remain broadly unchanged. Goods will continue to attract the applicable Most Favoured Nation (MFN) tariff in addition to the 10% Section 301 duty.

According to the report, MFN tariffs and the 10% Section 301 duty apply to around 70% of India's exports to the United States, while products covered under Section 232 continue to face 25%–50% levies along with the applicable MFN duty.

The report also noted that India is outside the textile tariff-rate quota mechanism, a factor that exporters said could have implications for sourcing decisions in selected sectors.