The United States has finalised new Section 301 tariffs following its investigation into forced labour practices across global supply chains, maintaining a 10% tariff on Indian exports instead of the 12.5% rate proposed in the draft findings. 

The decision comes as the temporary 150-day universal 10% tariff introduced in February 2026 expires on July 24. India’s revised rate reflects recent policy measures taken by the government to prohibit the import of goods produced using forced labour.

The Office of the U.S. Trade Representative (USTR) concluded that countries enforcing or committing to stronger forced labour import restrictions would qualify for the lower tariff. 

Earlier this month, India issued a notification banning the import of goods manufactured using forced labour, a move that helped it secure the reduced rate. USTR stated that the objective of the tariffs is to strengthen global labour standards while addressing trade practices linked to forced labour.

Despite avoiding the higher duty, nearly 70% of India’s exports to the U.S., including engineering products, textiles, garments, chemicals, machinery, plastics, leather goods, gems and jewellery, furniture, and several manufactured products, will continue to attract the additional 10% tariff alongside existing Most Favoured Nation (MFN) duties. 

Products covered under Section 232, including steel, aluminium, copper, automobiles, auto components, and certain derivative products, will continue to attract separate tariffs of up to 50%.

The USTR has also exempted certain raw materials and products that are either unavailable in sufficient quantities within the U.S. or are essential to avoid supply chain disruptions. Additionally, some product categories from selected trading partners have received exemptions to encourage stronger compliance with forced labour regulations.

Industry reactions remain divided. Export bodies, including the Federation of Indian Export Organisations (FIEO), believe India has preserved its competitive position because several rival exporting nations in labour-intensive sectors will face the same 10% tariff. 

However, representatives from the gems and jewellery industry have cautioned that the added duty could squeeze profit margins, reduce price competitiveness, and slow export growth in one of India’s largest overseas markets. Adding to the uncertainty, the U.S. is still conducting a separate Section 301 investigation into excess manufacturing capacity, which could lead to additional trade measures in the coming months.

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