NEW DELHI — A proposed new U.S. tariff targeting imports from India has raised concerns among Indian exporters, with the automotive components and food industries warning that the measure could disrupt trade even as New Delhi and Washington continue negotiations on a broader bilateral trade agreement.
The Office of the United States Trade Representative (USTR) has proposed an additional tariff of up to 12.5% on imports from India as part of a Section 301 trade action tied to allegations that India has failed to effectively prohibit imports of goods produced with forced labour. The proposal remains subject to public consultation and has not been finalized.
The USTR said the proposed duties are intended to address what it described as policies and practices that burden U.S. commerce. Public comments are due by July 6, with a hearing scheduled for July 7 before the agency decides whether to proceed with the tariffs.
India's Ministry of Commerce and Industry has rejected the U.S. findings, saying New Delhi is actively engaging with Washington through the consultation process and that the proposal is still under review. Indian officials have maintained that the country has legal safeguards against forced labour and will present its position during the U.S. proceedings.
Industry representatives said the proposed duties could particularly affect exports of auto components, processed foods, seafood and other labour-intensive products that depend heavily on the U.S. market. Business groups warned that additional tariffs could reduce the competitiveness of Indian goods and increase costs for American importers and consumers.
Trade analysts said the proposal comes at a sensitive stage in U.S.-India economic relations, with both governments continuing negotiations aimed at reaching a comprehensive bilateral trade agreement. They noted that the tariff proposal is separate from those talks but could complicate efforts to strengthen commercial ties.
Earlier this year, the two countries announced an interim trade framework designed to expand market access and reduce tariffs on a range of goods while negotiations on a broader pact continue. Both sides have described those discussions as constructive and have reiterated their commitment to concluding a wider agreement.
For now, the proposed tariff remains under review, with no final decision announced by U.S. authorities. Indian officials have said they will continue participating in the consultation process while pursuing broader trade negotiations with Washington.
