India, US investigate forced labour, concerns over industrial overcapacity
The commerce ministry said India remains in discussions with the US on the matter as Section 301 proceedings to finalize the interim trade agreement are ongoing. File | Photo credit: Getty Images
India on Wednesday (Jun 3, 2026) said India is engaged with the United States in a Section 301 investigation into concerns related to forced labor and industrial overcapacity.
The country is also engaging “in parallel” with the US to finalize an interim trade agreement, the framework of which was announced through a joint statement on February 7.
On March 11 and 12, 2026, the Office of the United States Trade Representative (USTR) opened two separate Section 301 investigations involving 60 economies regarding concerns related to forced labor and industrial overcapacity.
On June 2, ÚSTR released its findings as part of the forced labor investigation and proposed additional tariffs on imports from 60 economies.
The proposal includes a 10% tariff on imports from Canada, Ecuador, the European Union, Indonesia, Mexico and Pakistan and a 12.5% tariff on imports from 54 other economies, including India and China. Pakistan and Indonesia are India’s competitors on the trade front.
The measure remains a draft and has not yet been finalized.
“India remains engaged in Section 301 proceedings with the US on this matter. India is also concurrently engaged with the US in finalizing the Framework Agreement as announced on February 2, 2026 and in accordance with the joint statement issued on February 7, 2026,” the Commerce Department said.
He said that products covered by Section 232 (Sectoral) Tariff and certain other products are excluded from these tariff proposals. A special mechanism was also proposed for textile and clothing products that would allow a certain volume of imports from selected economies to enter the US at lower tariff rates.
“According to the report, the proposed tariffs are not yet final and interested parties can submit requests to participate in public hearings until June 22, 2026. Written comments can be submitted until July 6, 2026,” the ministry said.
Public hearings will be held on Sunday (July 7, 2026). Before making a final decision on the proposed measures, the ÚSTR will consider the comments and testimony received.
Published – 03 Jun 2026 15:13 IST