GTRI Questions US Forced-Labor Tariff on Indian Exports, Citing Lack of Evidence

New Delhi: The Global Trade Research Initiative (GTRI) has questioned the rationale behind the United States' decision to impose a 10 per cent Section 301 forced-labour tariff on Indian exports, saying the measure is not backed by evidence and appears intended to preserve existing trade barriers.

"The 10% U.S. tariff on Indian exports under the forced-labour investigation lacks a credible factual basis," the report said, adding that "The United States has not produced evidence that India imports goods made with forced labour."

GTRI noted that India had already amended its Foreign Trade Policy in June 2026 to prohibit imports produced using forced or compulsory labour, a move that helped reduce the proposed tariff on Indian exports to 10 per cent from the initially proposed 12.5 per cent.

Despite the policy change, around 70 per cent of India's exports to the U.S., including engineering goods, textiles and garments, chemicals, machinery, plastics, leather products, gems and jewellery, and furniture, will now attract the normal Most Favoured Nation (MFN) tariff in addition to the new 10 per cent Section 301 duty.

The report argued that "The tariff therefore appears to serve primarily as a mechanism to preserve the Trump administration's tariff wall after the expiry of the temporary Section 122 tariffs, rather than as a targeted response to a proven forced-labour problem involving India."

The report said that around 70 per cent of India's exports to the US--including engineering goods, textiles and garments, chemicals, machinery, plastics, leather products, gems and jewellery, furniture and most other manufactured goods--will now attract the normal Most Favoured Nation (MFN) tariff plus the new 10 per cent Section 301 duty.

Around 8 per cent of India's exports, comprising products covered under Section 232 such as steel, aluminium, copper products and auto components, will continue to face existing tariffs of 25-50 per cent in addition to MFN duties, while exempt products will continue to pay only MFN tariffs.

"The tariff therefore appears to serve primarily as a mechanism to preserve the Trump administration's tariff wall after the expiry of the temporary Section 122 tariffs, rather than as a targeted response to a proven forced-labour problem involving India." GTRI noted.

The report also pointed out that India has not been included in the textile and apparel tariff-rate quota (TRQ) exemption available to Bangladesh, Cambodia, Indonesia and Malaysia for specified exports using US-origin cotton and fibre.