India-US Trade Talks: Forced Labour Allegations and Tariffs Discussed

India continues discussions with the United States regarding Section 301 proceedings concerning forced labour. These talks occur as both nations negotiate a bilateral trade agreement. The US Trade Representative has proposed tariffs on imports from several economies, including India, if they do not effectively prohibit goods made with forced labour. India disputes these allegations and seeks resolution within trade talks.

India remains engaged with the United States on the ongoing Section 301 proceedings related to forced labour issues, the commerce ministry said on Wednesday, as the two countries continue negotiations on a proposed bilateral trade agreement.

The statement comes after the Office of the United States Trade Representative (USTR) proposed additional tariffs on imports from 54 economies, including India, under investigations examining whether countries have imposed and effectively enforced prohibitions on goods produced with forced labour.

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The USTR has proposed an additional duty of 12.5% on economies that, in its assessment, have not established or effectively implemented measures to prevent imports linked to forced labour. Economies that have adopted and enforced such prohibitions, or committed to doing so under reciprocal trade arrangements, would face a lower proposed tariff rate of 10%.

The development comes as senior Indian and US negotiators are holding discussions in New Delhi to finalise the contours of a bilateral trade agreement. Indian officials have indicated that securing relief from Section 301 actions and obtaining tariff concessions comparable to or better than competing economies remain key priorities in the negotiations.

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According to earlier reports, India had disputed the allegations underpinning the forced labour investigation and urged Washington to address the matter within the framework of ongoing trade talks rather than through unilateral trade measures.

Section 301 of the US Trade Act empowers the USTR to investigate policies and practices of foreign governments that it considers unreasonable or discriminatory and that burden US commerce. Following such investigations, Washington can impose tariffs or other trade restrictions as a remedy.

The proposed measures are part of a broader US effort to revive country-specific trade actions and tariff mechanisms, although the proposals are subject to consultations and further review before any final determination.