More Stories

Informist, Friday, Jul. 24, 2026

 

NEW DELHI – Trade bodies were divided in their assessment of the US's 10% forced-labour tariffs on imports from India. The US Friday imposed a 10% tariff on imports from India as part of a sweeping trade action targeting 60 countries for failing to effectively prohibit imports of goods produced using forced labour. 

   

The Office of the US Trade Representative took the action under Section 301 of the Trade Act of 1974, replacing the temporary 10% worldwide tariff that expired on Friday. India is among the 17 countries facing a 10% tariff, while many others face a higher 12.5% rate. 

Global Trade Research Initiative, a think tank on trade, said the 10% tariffs on Indian exports under the forced-labour investigation lack a credible factual basis, adding that the US has not produced evidence that India imports goods made with forced labour. In response to the US's concerns, India had last week amended its foreign trade policy to ban the import of goods produced using forced or compulsory labour. 

 

"Indian law also prohibits forced labour in domestic production through constitutional guarantees and labour statutes," Ajay Srivastava, founder of Global Trade Research Initiative, said. "The tariff, therefore, appears to serve primarily as a mechanism to preserve the Trump administration's tariff wall after the expiry of the temporary Section 122 tariffs, rather than as a targeted response to a proven forced-labour problem involving India," he added.  

 

Last week, the commerce ministry notified that the import of goods produced or manufactured, wholly or in part, through the use of forced labour will be prohibited. And thus, India secured the lower 10% tariff, down from the 12.5% rate proposed in the US Trade Representative's draft. 

 

Meanwhile, the Federation of Indian Export Organisations, an apex body of trade promotion organisations in the country, views the latest tariffs differently. FIEO President S.C. Ralhan said while the imposition of the additional 10% tariff will increase the landed cost of Indian products, the overall impact should be viewed from a proper competitive perspective rather than merely focusing on the headline tariff figure.

 

"The fact that India has been placed in the lower 10% tariff category — while several competing exporting nations, including China, Vietnam, Thailand, Turkey, the UAE, Brazil, South Africa, and others, are facing a higher tariff of 12.5% — demonstrates that the US has acknowledged the policy measures taken by the Indian government to strengthen frameworks regarding forced labour. This has helped India secure a relatively better position compared to many of its global competitors," Rahlan said. 

 

Rahlan said Indian exporters could benefit from 'trade diversion' in several product categories where a higher tariff of 12.5% applies to competing nations. "Even a 2.5% differential can influence sourcing decisions in highly competitive markets, especially when Indian exporters are capable of offering quality products, reliable delivery, and stable supply chains," he said. 

 

Srivastava also said that the Office of the US Trade Representative has another investigation against India underway that alleges excess capacity under Section 301 of the US Trade Act of 1974, which could lead to additional tariffs on a wide range of industrial products.

 

"Washington has also increasingly imposed country-specific tariffs, recently targeting Brazil and Canada. Similar measures could eventually be extended to India citing purchases of Russian oil, or broader geopolitical considerations," Srivastava said.  End

 

Reported by Pratiksha

Edited by Saji George Titus

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.