Final US Section 301 Measures on Forced Labour: India Placed in Lower Tariff Tier at 10%

The United States Trade Representative (USTR) announced on 23rd July 2026 the final measures under Section 301 of the U.S. Trade Act, 1974. The measures follow USTR’s investigation into the acts, policies and practices of 60 economies, including India, relating to the imposition and enforcement of prohibitions on the importation of goods produced with forced labour.

USTR has imposed an additional 10% ad valorem duty on imports from India. This is a reduction from the 12.5% duty initially proposed on 2nd June 2026.  The Government of India remained closely engaged with USTR throughout the investigation through detailed written submissions and in-person consultations, including participation in public hearings. As a result of these sustained efforts, India has been placed in the lower tier of additional tariffs under the final measures, providing a relative advantage to Indian exports in key sectors.

A substantial share of India’s exports to the United States, which currently attract zero additional duties, such as generic pharmaceuticals, smartphones and certain other specified products, continue to remain outside the scope of the additional 10% duty. Further, products already covered under Section 232 measures, including steel, aluminium and auto parts, are not subject to the additional 10% duty. Section 232 duties are applicable broadly to all countries with limited exceptions. On account of these exemptions, an estimated 45% of India’s exports to the United States remain outside the purview of the additional 10% Section 301 duty. The remaining 55% of exports will attract the additional 10% duty, where India’s tariff incidence is comparatively lower than that for most other economies covered by the investigation.

The textile specific mechanism referenced in the final measures is yet to be established and operationalised. India continues to engage with the U.S. on this matter as part of the ongoing negotiations for the India-U.S. Bilateral Trade Agreement.

The Government remains committed to working with the United States towards the early conclusion of the India-U.S. Bilateral Trade Agreement, as announced on 2nd February 2026 and in accordance with the Joint Statement issued on 7th February 2026.