U.S. Imposes Permanent 10% 'Forced Labour' Tariff on India as Temporary Trade Duties Expire

The United States has announced a permanent 10% tariff on imports from India under its new trade policy aimed at preventing goods produced using forced labour from entering the U.S. market.

The decision comes as the temporary 10% tariffs, imposed on all U.S. trading partners for 150 days in February 2026, officially expired on July 24.

Why the New Tariffs Were Imposed

The new tariffs follow an investigation conducted by the Office of the U.S. Trade Representative (USTR) under Section 301 of the Trade Act, 1974. The investigation assessed whether U.S. trading partners had effective measures in place to prevent the import of products made using forced labour.

Initially, India was among the countries proposed to face a 12.5% tariff. However, after the Indian government introduced a notification banning the import of goods produced through forced labour, the tariff was reduced to 10%.

U.S. Justifies the Move

U.S. Trade Representative Jamieson Greer said the new tariffs are intended to strengthen global efforts against forced labour and improve labour standards worldwide.

He stated that countries taking concrete steps to prohibit forced labour imports would receive lower tariff rates than those that had failed to implement such measures.

Impact on Indian Exports

The new tariff is expected to affect around 70% of India's exports to the United States, including:

•Engineering goods

•Textiles and garments

•Chemicals

•Machinery

•Plastics

•Leather products

•Gems and jewellery

•Furniture

•Other manufactured goods

These products will now face the 10% Section 301 tariff in addition to the existing U.S. Most Favoured Nation (MFN) import duties.

Meanwhile, products already covered under Section 232 of U.S. trade law—including steel, aluminium, copper, auto components, and certain derivative products—will continue to attract 25% to 50% tariffs.

More Tariffs Could Follow

The U.S. is also conducting a separate investigation into whether countries are exporting products using excess manufacturing capacity that harms American industries.

If that investigation finds violations, India and several other countries could face additional tariffs in the future.

Certain Products Exempted

The U.S. has exempted some products from the new tariff, particularly raw materials that are difficult to source domestically or are essential for American industries.

Some trading partners have also received product-specific exemptions to encourage stronger enforcement of forced labour import bans.

The latest move marks another significant development in U.S.-India trade relations, with exporters closely watching future decisions that could further impact bilateral trade.