US imposes 10% tariff on Indian goods over forced labour: How India avoided a bigger hike

📌 Summary:

• The US placed India in a lower 10% tariff band, after initially considering a steeper 12.5% rate; the lower rate followed "constructive talks" with Washington on labour practices
• The US Trade Representative (USTR) announced tariffs of 10-12.5% on 60 economies, directed by President Trump, over inadequate steps to ban imports of goods made with forced labour
• India is among 17 economies in the lower 10% band — alongside the UK, Canada, Indonesia, Bangladesh, Mexico, Pakistan, Sri Lanka, Malaysia and others
• The 10% rate applies to economies that ban forced-labour imports, have committed to do so via a reciprocal trade agreement, or already have a partial ban
• EU, Taiwan, Japan, South Korea and Switzerland face 10-12.5% on top of existing duties; all others investigated face the full 12.5%; new tariffs take effect Friday
• Legal basis: USTR opened Section 301 (Trade Act of 1974) investigations into 60 economies in March, held talks with 45+ governments, public hearings and reviewed 1,600+ comments
• The move follows a US Supreme Court ruling that many tariffs under emergency powers were unlawful, pushing the administration to use other legal routes

🎯 UPSC Relevance: GS2 IR — India-US trade relations and trade diplomacy; GS3 Economy — impact of US protectionism and labour-standard conditionalities on India's exports.

📝 Prelims Facts:

• Section 301 of the US Trade Act of 1974 is the legal basis for these tariffs
• India is in the 10% band; the full rate is 12.5%; 60 economies were investigated
• Tariffs are pegged to steps against forced-labour imports, not on Russian-oil purchases in this case

🔑 Key Term: Section 301 — a provision of the US Trade Act of 1974 that lets the USTR investigate and act against foreign trade practices deemed unfair or harmful to US commerce.