- Why in news
- On 23 July 2026 the USTR announced final Section 301 measures on forced-labour imports. India got an additional 10% duty, down from the 12.5% proposed on 2 June 2026. The Commerce Ministry explained the outcome on 25 July 2026.
- What it is
- Section 301 of the U.S. Trade Act, 1974 lets the United States Trade Representative investigate foreign trade practices it considers unfair and act against them, mainly through tariffs. Here the investigation covered 60 economies over their rules on importing goods made with forced labour. Section 232 is a different US law, used for duties on grounds of national security.
- Legal basis
- The measures come under Section 301 of the U.S. Trade Act, 1974, and were announced by the USTR.
- Scope of probe
- The USTR investigated 60 economies, including India, over prohibitions on importing goods made with forced labour.
- Exempt goods
- Items already under Section 232 duties, such as steel, aluminium and auto parts, are not subject to the new 10% duty.
- Textile mechanism
- A textile-specific mechanism mentioned in the final measures is not yet set up. India is raising it in the India-US Bilateral Trade Agreement talks.
Don’t confuse with Section 301 vs Section 232: Section 301 targets unfair foreign trade practices and is country-specific. Section 232 targets imports on national security grounds and applies broadly to all countries.
Don’t confuse with Ad valorem vs specific duty: An ad valorem duty is charged as a percentage of the value of goods. A specific duty is a fixed amount per unit.
International bodies and relations: the largest group of news questions in Prelims (61 since 2013), often about background, members and location. In Mains, 27 news-triggered questions, mostly on India's interests.
Why it matters
- India sits in the lower tariff tier, giving its exports a relative edge over most of the 60 economies probed.
- Exemptions for generic pharmaceuticals and smartphones protect major export items.
Problems
- The 10% duty falls on about 55% of India's exports to the US, which can hurt price competitiveness.
- The textile mechanism is still not operational, leaving a labour-intensive sector uncertain.
Way forward
- Conclude the India-US Bilateral Trade Agreement early and seek textile relief in it.
- Keep engaging the USTR through submissions and consultations, and strengthen supply-chain labour compliance.
Put in your answer
Trade deal track: The India-US BTA was announced on 2 February 2026 and a Joint Statement followed on 7 February 2026.
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No practice question for this one; the card may still help an answer. Why: Affects India's exports and trade ties. International items are 27 of 161 news-set Mains questions, but this is a fresh tariff event with few standing facts.
Worth revising until Prelims 2028: most news questions come within two years of the event.