The United States has introduced a 10 per cent tariff on goods imported from India and 16 other countries, part of a broader crackdown on products made using forced labour.
India was initially set to face a steeper 12.5 per cent levy when the tariffs were first proposed on June 3. But after New Delhi amended its foreign trade policy on July 14 to formally ban imports of goods made with forced labour, it was moved into the lower 10 per cent bracket instead.
US President Donald Trump said in a memorandum that countries which now have — and enforce — laws against importing forced-labour goods would get the lighter rate as an incentive to keep enforcing such prohibitions.
In all, 17 countries, including India, Canada, the UK, Bangladesh and Pakistan, face the 10 per cent tariff, while 43 others without such laws, including China and Japan, face 12.5 per cent.
Some exemptions apply for raw materials in short domestic supply and goods the US cannot produce in sufficient quantity at home.
The new tariffs took effect at 12.01 am Friday, replacing a temporary 10 per cent tariff imposed after the Supreme Court struck down Trump's original "Liberation Day" tariffs in February.
India is contesting the US investigation and wants the matter addressed through the ongoing bilateral trade agreement rather than unilateral tariffs.
The US remains India's largest export market, with bilateral trade at nearly $141 billion in 2025. One trade expert called the reduction "modest in percentage points but significant in signalling".
The Washington Post reports the administration is preparing another tariff round targeting countries that subsidise excess manufacturing capacity.
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