India Blasts US 10% Forced Labor Tariff, Citing Lack of Evidence

India Global Trade Research Initiative (GTRI) has sharply condemned the United States' new 10% Section 301 tariff on Indian exports, effective July 24, 2026, arguing Washington has failed to provide any credible evidence of forced labor violations. The economic think tank suggests the move is more about maintaining existing trade barriers inherited from the Trump administration than genuinely addressing human rights concerns. This comes as approximately 70% of India manufactured exports now face this additional duty, alongside their standard Most Favored Nation (MFN) tariff. The US Trade Representative (USTR) initiated investigations into 60 economies over alleged failures to prohibit forced labor imports, initially proposing a 12.5% tariff on India. However, India swift amendment of its Foreign Trade Policy in June 2026, explicitly banning forced or compulsory labor imports, resulted in a reduced 10% tariff rate. New Delhi has consistently challenged the legal and evidentiary basis of the US findings, highlighting inconsistencies in the application of the tariff framework and asserting its strong domestic legal framework against forced labor. The new tariffs, which replaced temporary Section 122 tariffs, threaten to complicate ongoing US-India bilateral trade agreement (BTA) negotiations. With an upcoming Section 301 investigation into excess manufacturing capacity also looming, Indian exporters, particularly in labor-intensive sectors like textiles, garments, and engineering goods, are closely watching the situation. The coming months will reveal if diplomatic efforts can defuse these escalating trade tensions or if the US-India economic relationship is heading for a more protectionist era.