US imposes 10% tariff on India, Pak, Bangladesh, UK, others in forced labour probe
The United States imposed a 10% additional tariff on goods imported from India, Pakistan, Bangladesh, the United Kingdom, and roughly a dozen other economies, as part of a wider action covering about 60 trading partners
India secured the lower 10% rate — rather than the 12.5% rate applied to economies without any forced-labour import prohibition — after amending its Foreign Trade Policy to prohibit the import of goods produced using forced labour
Economies that had not adopted a comparable prohibition, such as China and Japan, were placed in the higher 12.5% tariff tier
The action was framed as targeting both human-rights concerns and what the US described as distortive trade practices arising from unaddressed forced labour in global supply chains
Foreign Trade Policy and the Foreign Trade (Development and Regulation) Act, 1992
India's Foreign Trade Policy (FTP) is issued under the statutory authority of the Foreign Trade (Development and Regulation) Act, 1992, which empowers the Central Government to regulate and develop foreign trade through orders notified in the Official Gazette. The Directorate General of Foreign Trade (DGFT), headed by the Director General of Foreign Trade, is the administrative authority responsible for advising the government on FTP formulation and for implementing it. India's forced-labour import prohibition was introduced through a DGFT notification inserting a new provision into the current FTP (2023).
Key Details
- Statutory basis: Foreign Trade (Development and Regulation) Act, 1992
- Implementing authority: Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industry
- The FTP 2023 amendment added Paragraph 2.20B, prohibiting the import of goods produced wholly or partly using forced labour
- The DGFT adopted the ILO's Forced Labour Convention, 1930 (No. 29) definition of forced labour for the new provision, and is empowered to conduct inquiries to determine whether specific goods were produced using forced labour
The FTP amendment is the specific regulatory step — distinct from any constitutional or criminal-law provision — that the US determination credited India with, placing it in the lower 10% tariff tier rather than the 12.5% tier applied to non-compliant economies.
Constitutional and Statutory Prohibition of Forced Labour in India
Independent of the trade-policy amendment, forced labour is separately prohibited under Article 23 of the Constitution of India, which bans "traffic in human beings and begar and other similar forms of forced labour," with contravention made a punishable offence. This is implemented through the Bonded Labour System (Abolition) Act, 1976, which abolished bonded labour, cancelled associated debts, and provided for the rehabilitation of freed bonded labourers.
Key Details
- Article 23 is a Fundamental Right under Part III of the Constitution, placed in the chapter on Right against Exploitation (Articles 23-24)
- Bonded Labour System (Abolition) Act, 1976 — deemed to have come into force October 25, 1975; makes bonded labour a cognisable, punishable offence
- India ratified ILO Convention No. 29 (Forced Labour Convention, 1930) in 1954 and the 2014 Protocol to the Convention in 2017
- India is also a party to the Abolition of Forced Labour Convention, 1957 (No. 105)
These pre-existing constitutional and statutory protections demonstrate India's longer-standing domestic legal framework against forced labour, distinct from — but complementary to — the newly added FTP trade-facing prohibition that was the specific trigger for the tariff tier differentiation.
Precedent: India's 2019 Removal from the US Generalized System of Preferences (GSP)
This is not the first instance of US trade preferences or tariff treatment for India being altered over compliance-related findings. In 2019, the US withdrew India from its Generalized System of Preferences (GSP) programme — under which India had been the largest beneficiary — citing inadequate market access for US goods, particularly in agriculture and dairy, and price controls on medical devices.
Key Details
- GSP withdrawal effective June 2019, following a review initiated in April 2018
- India was the largest beneficiary of the US GSP programme at the time of withdrawal
- Roughly $5.6 billion of Indian exports had received preferential duty treatment under GSP; annual benefit value was estimated near $190 million
- GSP is a unilateral, non-reciprocal tariff preference scheme under the WTO's Enabling Clause (1979), distinct from the Section 301 unfair-trade-practice tariffs used in the current forced-labour action
Both episodes illustrate the same pattern — the US using unilateral, non-negotiated trade-policy tools (preference withdrawal in 2019; tariff surcharge in 2026) tied to a compliance finding, rather than negotiated bilateral agreements, to adjust India's tariff treatment.
- US tariff on Indian goods: additional 10%, effective July 24, 2026
- Countries in the same 10% tier: includes India, Pakistan, Bangladesh, the United Kingdom, and Canada (17 economies with a forced-labour import prohibition)
- Higher 12.5% tier: applies to economies without a forced-labour import ban, including China and Japan among the 60 covered
- India's FTP amendment: DGFT notification inserting Paragraph 2.20B into the Foreign Trade Policy 2023, effective 30 days after Gazette publication
- India ratified ILO Convention No. 29 in 1954; ratified the 2014 Protocol in 2017
- India's 2019 GSP withdrawal affected an estimated $5.6 billion of preferential exports