The Indian government’s close engagement with the United States Trade Representative (USTR) during the Section 301 investigation on forced labor has resulted in India being positioned in the lower tier of additional tariffs under the final measures. This move provides a competitive edge to Indian exports in key sectors, as per an official statement released on Saturday.
On July 23, the USTR announced the final measures under Section 301 of the US Trade Act, 1974, following an investigation into the practices of 60 economies, including India, regarding prohibitions on goods produced with forced labor. India will now face a 10% ad valorem duty on imports from the U.S., a reduction from the initially proposed 12.5% duty.
The Ministry of Commerce and Industry stated that due to India’s sustained efforts, a significant portion of its exports to the U.S., including generic pharmaceuticals and smartphones, will not be subject to the additional 10% duty. Moreover, products like steel, aluminum, and auto parts, already covered under Section 232 measures, are exempt from this duty.
The Ministry further informed that approximately 45% of India’s exports to the U.S. will not be affected by the additional 10% Section 301 duty. The remaining 55% of exports will face this duty, which is comparatively lower for India than for other economies under investigation. Discussions are ongoing between India and the U.S. regarding the establishment of a textile-specific mechanism mentioned in the final measures.
