4 min readMumbai, New DelhiUpdated: Jun 4, 2026 01:21 AM IST
The Trump administration Wednesday proposed 12.5% tariffs on India and 53 other countries, including China, the UK and Japan, after a United States Trade Representative (USTR) trade investigation under Section 301 of the US Trade Act of 1974 declared that these countries have failed to impose a legal prohibition on “importation of goods produced wholly or in part with forced labour”.
The proposed tariffs, which can come into effect by July, have been announced while US and Indian negotiators are in the midst of talks in New Delhi to finalise a bilateral trade agreement.
The USTR has proposed a lower rate of 10% on six countries — Pakistan, Canada, Ecuador, the European Union, Indonesia and Mexico — stating that they have demonstrated a commitment to addressing forced labour imports and have committed to imposing and enforcing a forced labour import prohibition through a formal Agreement on Reciprocal Trade (ART) with the US.
The new set of Section 301 tariffs assumes significance as it could serve as the legal basis for the trade deals which were signed by the Trump administration. All the trade deals signed by the administration lost its legal standing after its reciprocal tariffs were declared invalid by the US Supreme Court in February.
While India has agreed to an agreement, a formal signing is due. The ongoing four-day talks are expected to iron out pending issues.
The Commerce and Industry Ministry, meanwhile, said that India remains engaged with the US on the matter as a part of Section 301 proceedings. India is also simultaneously engaged with the US for finalisation of a framework agreement, as was announced on February 2, 2026 and in accordance with the joint statement released on February 7, 2026.
“The proposed tariffs are not yet final, and stakeholders can submit requests to participate in public hearings by 22 June 2026. Written comments can be submitted until 6 July 2026. Public hearings will be held on 7 July 2026. The USTR will consider the comments and testimony received before taking a final decision on the proposed measures,” the Ministry said.
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Responding to questions at Citi’s 2026 India Conference in Mumbai, Sergio Gor, US Ambassador to India, said any tariff actions undertaken by the US administration are applied globally and are not targeted towards specific regions or countries such as India.
“Look, the reality of it is that the tariffs that were applied were applied around the world. So these weren’t tariffs that were picked at India. These were tariffs that were applied to everybody, from the European Union to Canada to Mexico, to literally almost every other country in Asia, including Japan and North Korea,” he said.
Gor said 99% of the negotiations between the two countries on a trade deal have been wrapped up, with just a few technical and legal sticking points left to iron out.
“It’s that 1% that we are striving to get across the finish line so that the leaders can have a signing and put that in stone and in law. And so we’re hopeful that it will get accomplished over the next weeks, or maybe several weeks, but it’s not going to be years,” he said.
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“One of the reasons this deal is tough is because for many years India has held the line on so many items that the United States was not able to get in here. That’s why it took 19 years for the European Union to crack that trade deal. And a lot of it (of the remaining 1%) is frankly technicalities. Part of it is when does something kick in, and that’s a lot of legal language that we’re hopeful that they’ll get there,” he said.
He said the talks will continue this week, with US negotiators slated to meet Commerce Minister Piyush Goyal Thursday.
