Washington has included India among 60 economies facing potential additional duties over alleged failures to prevent imports linked to forced labour…reports Asian Lite News Desk
India could face an additional 12.5 per cent tariff on exports to the United States under a new proposal by the Office of the United States Trade Representative (USTR), in a move that threatens to add fresh trade pressure on one of America’s largest trading partners.
The proposal, announced under Section 301 of the US Trade Act of 1974, targets 60 economies that Washington says have failed to adequately prohibit or enforce restrictions on the import of goods produced using forced labour.
If implemented, the measure would increase costs for a wide range of exporters, potentially affecting India’s competitiveness in the crucial US market.
The proposed tariff comes at a sensitive time for India, which has been seeking to expand exports and deepen economic ties with the United States while also negotiating trade related issues with Washington.
According to the USTR, the targeted economies have failed to effectively enforce measures preventing goods made with forced labour from entering their markets, creating what the agency described as unfair conditions for American workers and businesses.
In a statement, US Trade Representative Jamieson Greer said the failure of key trading partners to address imports linked to forced labour was “unacceptable”.
“This creates a dynamic where American workers are forced to compete globally on an unlevel playing field,” Greer said.
“We will no longer tolerate this disparity.”
The USTR said some trading partners have taken initial steps to address the issue through trade agreements and other commitments. However, it argued that further action was needed to ensure that global trade does not encourage or sustain forced labour practices.
Under the proposal, countries that have already implemented and enforced comprehensive prohibitions on forced labour imports, or have committed to doing so through reciprocal trade agreements, would face a lower additional tariff of 10 per cent.
All other economies covered by the investigation, including India, would be subject to a proposed additional duty of 12.5 per cent.
The agency has also proposed a special textile mechanism that would allow a specified volume of apparel and textile imports from certain economies to enter the United States at a reduced Section 301 tariff rate.
The proposed measures are not yet final. The USTR has scheduled public hearings on July 7, during which governments, businesses and other stakeholders will have an opportunity to present their views before any final decision is made.
For India, the proposal raises concerns about potential disruptions to exports at a time when manufacturers are looking to benefit from supply chain diversification and growing demand in the US market.
Should the tariffs be implemented, sectors with significant exposure to the United States could face additional costs and heightened uncertainty, adding another layer of complexity to trade relations between New Delhi and Washington.
