Hyderabad: The United States has named India among 54 economies it says have failed to prohibit imports of goods produced using forced labour, proposing additional duties of up to 12.5 per cent, even as trade officials from both countries are meeting in New Delhi to advance a bilateral trade agreement.
The Office of the United States Trade Representative (USTR) released findings from 60 investigations conducted under Section 301 of the US Trade Act of 1974. India figures in a list of economies that, Washington says, lack adequate measures to prevent the entry of goods made through forced labour.
What the USTR proposed
Under the proposal, countries that already ban such imports, or have committed to doing so under a reciprocal trade arrangement, would face an additional tariff of 10 per cent. Those without such frameworks face a higher rate of 12.5 per cent. A separate mechanism for textiles and apparel would allow specified import volumes from select economies at a lower Section 301 rate.
US Trade Representative Jamieson Greer said the failure of trading partners to act on forced-labour imports was creating an uneven playing field for American workers.
The other 53 economies named alongside India include China, Japan, the United Kingdom, Australia, Brazil, Saudi Arabia, the United Arab Emirates (UAE), South Korea, Vietnam and Bangladesh, among others. A separate group of six economies – Canada, Mexico, the European Union, Indonesia, Ecuador and Pakistan – was cited for failing to effectively enforce existing prohibitions.
Trade talks continue despite headwinds
The USTR action comes as a US trade delegation is in New Delhi for a three-day round of discussions aimed at finalising the first phase of a bilateral trade agreement (BTA).
Commerce Minister Piyush Goyal said on Monday, June 1, that most of the agreement was in place. “Mostly everything is finalised. As you know, US Ambassador Sergio Gor said that 99 per cent of the things have been finalised. Discussions are going on about small issues, commas and full stops,” he said, adding that India and the US would sign the first tranche of the BTA “as soon as possible.”
However, the deal is unlikely to be concluded before there is clarity on the tariff structure the Trump administration plans to adopt once the temporary 10 per cent levy lapses next month.
India faces two ongoing Section 301 probes, one on alleged overcapacity in sectors such as solar modules, steel and aluminium, and the other on forced-labour-linked imports.
The two sides had reached an interim arrangement in early February, but a subsequent US court ruling disrupted the tariff plan, slowing progress.
