“We found that India has failed to impose and effectively enforce a forced labor import prohibition..and failed to impose and effectively enforce a forced labor import prohibition is unreasonable. In section V, we found that the failure to impose and effectively enforce a forced labour import prohibition burdens or restricts U.S. commerce. For the foregoing reasons, the results of this investigation indicate that the acts, policies and practices of India related to the failure to impose and effectively enforce a forced labour import prohibition are unreasonable and burden or restrict U.S. commerce,” USTR said.

The proposed tariffs could be imposed as early as July 7, as USTR is currently seeking public comment on these proposed actions, with written comments due by July 6, 2026, and a public hearing scheduled for July 7, 2026.

Notably, India was also one of the worst hit by International Emergency Economic Powers Act (IEEPA) tariffs before they were declared illegal. Steep tariffs had resulted in a flight of foreign investment and resulted in steep depreciation of the domestic currency. The rupee has fallen almost 12% in the last one year. A formal trade deal remained aloof for months as the US demanded that India wind down imports of Russian oil and accept genetically modified American agricultural products.

However, the India-US joint statement of February said India will eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products, including dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products.

Indicating signs of disagreement, the US later revised a factsheet softening its claims about the gains it had secured from New Delhi and entirely dropping a section on digital services taxes. The earlier version of the factsheet said India had “committed to” buying more American products and purchasing “over $500 billion of U.S. energy, information and communication technology, coal, and other products”. The updated factsheet, as well as the joint statement, tempered the wording from “committed” to “intends”.

At a media conference on Monday to announce the operationalisation of the FTA with Oman, Commerce Minister Piyush Goyal said the negotiations are more or less complete and that India and the US have already agreed upon the first tranche of the framework agreement. “Talks will continue for a broader bilateral trade agreement,” he said, adding he expected to meet USTR Jamieson Greer later this month.

Experts pointed out that Section 301 tariffs could be worse than IEEPA (International Emergency Economic Powers Act) tariffs that the Trump administration used to pressure trade partners into accepting steep demands under trade deals. India was on the receiving end of the steepest 50% tariffs last year after trade talks broke down in the face of demands made by the US that were perceived as unreasonable by New Delhi.