The US Trade Representative (USTR) on Wednesday proposed an additional 12.5% tariff on imports from 54 countries, including India, over concerns related to the use of forced labour under Section 301.
"The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field," US Trade Representative Jamieson Greer said on Wednesday.
In its report, the USTR said India has failed to impose and effectively enforce a ban on imports linked to forced labour, calling the practice unreasonable and stating that it burdens or restricts US commerce.
The USTR has proposed a multi-country trade crackdown under Section 301. The US launched investigations against several economies, including India, over concerns related to forced labour and excess industrial capacity, which were originally flagged on March 11 and 12, 2026.
Reacting to the proposal, the Indian government said it remains engaged with the US on the matter as part of the Section 301 proceedings. In a statement issued on Wednesday, the Commerce Ministry said India is also engaged in parallel discussions with the US to finalise a framework agreement, as announced on February 2, 2026, and in accordance with the joint statement released on February 7, 2026.
According to the USTR, the findings of its investigation indicate that India's acts, policies and practices related to the failure to impose and effectively enforce a forced-labour import prohibition are unreasonable and burden or restrict US commerce.
Stakeholders wishing to participate in the public hearings must submit their requests and testimony summaries by June 22, 2026. The deadline for written comments is July 6, 2026, followed by USTR public hearings on July 7, 2026.
The USTR is expected to issue its final decision in late June or July.
The proposal comes amid the visit of a US negotiating team, led by Assistant US Trade Representative Brendan Lynch, to New Delhi from June 1 to June 4 to finalise the details of a proposed Bilateral Trade Agreement (BTA) with India.
Meanwhile, US Ambassador to India Sergio Gor said on Wednesday that 99% of the negotiations on a trade deal between the two countries had been completed, with only a few technical and legal issues remaining.
"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 will get accomplished over the next weeks, or maybe several weeks, but it’s not going to be years," Gor said.