In March, the US Trade Representative (USTR) launched two unilateral Section 301 investigations against a number of countries, including India, over excess capacity and failures to eradicate forced labour in global supply chains.
Also read: USTR reveals Section 301 findings, proposes 12.5% additional tariffs on imports from New Delhi & others
On June 2, the USTR proposed imposing 12.5 per cent tariffs on 54 countries, including India, for allegedly failing to prohibit the import of goods produced with forced labour. The report of the second probe (excess capacity) is awaited.
The conclusion of the probe is important as the temporary 10 per cent additional tariffs imposed by the US will end on July 24. After that, only the MFN (most favoured nation) tariffs will apply on the USA’s trading partners.
“So if the US want us to pay any additional tax…they have to finish the Section 301 process before that,” the official said.
India is seeking lower tariffs than its competitors, like members of Asean (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam), as well as Sri Lanka and Bangladesh.Last week, Commerce and Industry Minister Piyush Goyal said that India and the US are moving towards closing all the open ends of the interim trade agreement, and both sides are likely to execute the “very, very vibrant” first phase of the pact by the middle of July.
The US team was here from June 2-4 for finalisation of the deal. They held discussions with the Indian team.
A high-level team is expected to visit India towards the end of this month. The team is likely to be led by US Trade Representative Jamieson Greer.
The US was the second-largest trading partner of India in 2025-26.
India’s outbound shipments to the US grew marginally by 0.92 per cent to USD 87.3 billion during 2025-26, while imports increased 15.95 per cent to USD 52.9 billion. The trade surplus declined to USD 34.4 billion in 2025-26 from USD 40.89 billion in 2024-25.