U.S. slaps 10% tariffs on goods imported from India over issue forced labour
The United States imposed an additional 10% tariff on goods imported from India, effective from July 24, 2026, under a Section 301 investigation into the enforcement of forced-labour import bans
The tariff followed a US Trade Representative (USTR) determination, opened in March 2026, covering 60 trading economies found to inadequately enforce prohibitions on importing goods made with forced labour
India had earlier notified a ban on the import of goods made using forced labour, a step that helped it secure the lower 10% rate rather than the higher 12.5% rate applied to economies without any such prohibition
India separately sought a review of the tariff determination, arguing that the underlying finding lacked adequate legal basis
The levy is additional to India's existing Most Favoured Nation (MFN) tariff schedule under WTO commitments and to any other applicable US duties
Section 301 of the US Trade Act, 1974 — Legal Basis for the Tariff
Section 301 (Title III, Sections 301-310) of the US Trade Act of 1974 empowers the US Trade Representative to investigate and act against foreign government acts, policies, or practices found to be "unjustifiable," "unreasonable," or "discriminatory" and burdening US commerce. It allows the President to impose tariff or non-tariff retaliation to secure removal of the offending practice, following an investigation and a public comment/hearing process.
Key Details
- Administered by the USTR under Title III of the Trade Act of 1974
- Distinguishes "unjustifiable" (violates international legal obligations), "unreasonable," and "discriminatory" practices
- Used historically against IP violations, market-access barriers, and (as here) inadequate forced-labour import enforcement
- Became the Trump administration's primary tariff tool in 2026 after the US Supreme Court ruled that a separate emergency-powers statute (IEEPA) could not be used to impose tariffs
The 10% duty on Indian goods was not an emergency-powers tariff but a Section 301 action — giving it a more durable statutory basis that survives court challenges to the President's emergency powers.
Why the US Shifted From IEEPA to Section 301
In February 2026, the US Supreme Court ruled 6-3 (in a pair of cases including Learning Resources v. Trump) that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs, since the statute's language on "regulating importation" does not amount to a taxation power. This struck down the administration's broad "reciprocal"/baseline tariffs, forcing a shift to older, court-tested trade statutes such as Section 301 (unfair practices) and Section 122 (balance-of-payments emergency tariffs, capped at 15% for 150 days).
Key Details
- IEEPA-based tariffs were terminated with effect from February 24, 2026
- Section 122 of the Trade Act, 1974 permits a temporary import surcharge (up to 15%) for a maximum of 150 days to address balance-of-payments problems — used as a stopgap after the ruling
- Section 301 tariffs, unlike IEEPA or Section 122 tariffs, require a country-specific investigation and finding of an unfair practice, giving them a narrower but more litigation-resistant footing
- The forced-labour Section 301 tariffs on 60 economies took effect on July 24, 2026, timed with the expiry of the interim Section 122 tariff
The India-specific 10% forced-labour tariff illustrates how US trade policy pivoted from broad emergency-power tariffs (struck down by courts) to narrower, statute-backed investigations targeting specific practices.
India's Forced-Labour Legal Framework
Forced labour is constitutionally prohibited in India under Article 23 (prohibition of traffic in human beings and forced labour) and addressed through statutes such as the Bonded Labour System (Abolition) Act, 1976. India ratified the International Labour Organization's Forced Labour Convention, 1930 (No. 29) at independence and its 2014 Protocol in 2017, which requires states to take effective measures to prevent forced labour, including in supply chains.
Key Details
- Article 23 of the Constitution prohibits forced labour and human trafficking; violation is a punishable offence
- Bonded Labour System (Abolition) Act, 1976 abolishes bonded labour and provides for rehabilitation
- India ratified ILO Convention No. 29 (1930) at independence and its 2014 Forced Labour Protocol in 2017
- The US Tariff Act of 1930, Section 307, separately bars imports of goods made wholly or in part by forced or convict labour — the underlying US import-ban standard that the Section 301 probe assessed compliance against globally
India's move to formally ban imports of forced-labour-made goods was intended to demonstrate reciprocal enforcement comparable to the US's own Section 307 import ban, to qualify for the lower 10% tariff tier rather than the 12.5% tier.
- Additional US tariff on Indian goods: 10%, effective July 24, 2026
- Alternative higher rate for non-compliant economies: 12.5%
- Number of economies covered by the Section 301 forced-labour investigation: 60, collectively covering an estimated 99.4% of US trade
- IEEPA tariffs struck down by US Supreme Court: February 20, 2026 (6-3 ruling); terminated February 24, 2026
- Legal basis for the current tariff: Section 301, Trade Act of 1974 (Title III)
- India ratified ILO Forced Labour Protocol (2014) in 2017