Washington/New Delhi: The US has proposed to impose 12.5 percent tariffs on 54 countries, including India, for allegedly failing to prohibit the import of goods produced with forced labour, even as officials from New Delhi and Washington are currently holding three-day talks to finalise the first tranche of the bilateral trade agreement.

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The talks that started on Tuesday are being held in New Delhi.

Reacting to the proposed 12.5 percent tariff, the Indian commerce ministry said New Delhi is engaged with the US on the two Section 301 investigations - over concerns related to forced labour and excess industrial capacity. The country is also "parallelly" engaged with the US for finalisation of an interim trade agreement, a framework for which was announced through a joint statement on February 7.

The US Trade Representative (USTR) has proposed the additional duty following investigations launched in March against 60 countries under Section 301 of the Trade Act of 1974 over concerns related to forced labour.

The measure remains a proposal and has not yet been finalised, the USTR said, adding that interested parties can submit requests to appear at hearings and summaries of testimony by June 22. The USTR is scheduled to hold hearings on July 7.

"India remains engaged with the US on the matter as a part of Section 301 proceedings. India is also parallelly engaged with the US for finalisation of a framework agreement as was announced on 2nd February 2026 and in accordance with the joint statement released on 7th February 2026," the commerce ministry said.

The USTR has proposed duties on all goods barring a few. A special mechanism has also been proposed for textile and apparel products that could allow a certain volume of imports from selected economies to enter the US at lower tariff rates.

The 12.5 percent duty has been proposed on 54 countries including Argentina, Australia, Bangladesh, Brazil, Cambodia, China, India, Israel, Japan, Malaysia, New Zealand, Norway, Oman, Philippines, Qatar, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Sri Lanka, Switzerland, Thailand, the UAE, the UK, and Vietnam.

A 10 percent additional import duty has been proposed on six nations - Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan.

The USTR statement said that it has determined that the acts, policies, and practices of these 60 economies related to the failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labour are unreasonable and burden or restrict US commerce, and are thus actionable under the provision.

"The failure of our most important trading partners to address the importation of goods made with forced labour is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field, US Trade Representative Ambassador Jamieson Greer said in a statement.

"We will no longer tolerate this disparity," he said.

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Interested parties can submit requests to appear at hearings and summaries of testimony by June 22, 2026, while written comments are due by July 6 on the proposed action. The USTR is scheduled to hold hearings on July 7. A final decision is expected potentially before the expiry of the temporary Section 122 tariffs (10 percent) on July 24.

Greer said though some trading partners have taken initial steps to prevent the importation of forced labour goods, including through USMCA (US-Mexico-Canada Agreement) and commitments in Agreements on Reciprocal Trade, "each of our trading partners must do more to ensure that trade does not perversely encourage and entrench forced labour globally".

In its submissions to the USTR on the probe, India has denied the allegations under the forced labour clause and asked the US to end the investigations, saying such matters should be addressed within the framework of ongoing bilateral trade negotiations.

The Office of the United States Trade Representative (USTR) launched two separate Section 301 investigations on March 11 and 12, 2026, covering 60 economies over concerns related to forced labour and excess industrial capacity. The USTR on June 2 issued its findings in the forced labour investigation.

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