US Tariffs on 60 Nations: How New Forced Labour Rules Hit India

Context: A New Trade Weapon

The United States has imposed tariffs on goods imported from 60 countries, citing concerns over forced labour in supply chains. The action, reported across multiple news outlets, marks a significant escalation in how Washington links trade policy to labour practices. India is among the nations hit, facing a 10 per cent tariff on all exports to the US.

The decision follows a year-long review by the US Department of Homeland Security and the Office of the US Trade Representative. Officials say the tariffs are designed to punish countries that fail to meet international labour standards. The list includes major Asian economies, African nations, and several European countries.

Background: From Warnings to Action

For years, the US has used tools like the Uyghur Forced Labor Prevention Act to target specific goods from China. The new policy widens that net dramatically. Instead of focusing on products from a specific region, it now applies tariffs across entire economies based on systemic labour concerns.

The Trump administration had flagged forced labour as a trade priority in early 2025. A federal investigation identified what it called “widespread patterns” of coerced work in manufacturing, agriculture, and mining across multiple countries. The tariff rates vary by nation — India's 10 per cent is among the lower bands, while some countries face rates as high as 25 per cent.

India's Ministry of Commerce had engaged with US officials during the review period. New Delhi argued that its domestic laws, including the Bonded Labour System (Abolition) Act, already address the issue. But Washington was not convinced.

Why It Matters: India's Export Exposure

India exported goods worth nearly $80 billion to the US in the last financial year. A 10 per cent tariff makes Indian products more expensive for American buyers. Textiles, leather goods, carpets, agricultural produce, and pharmaceutical ingredients are among the sectors most exposed.

The timing is particularly damaging. Indian exporters were already grappling with slowing demand in Europe and rising competition from Vietnam and Bangladesh. The US tariff adds another layer of cost. Industry bodies such as the Confederation of Indian Industry have warned that small and medium enterprises — which supply many of these goods — will struggle to absorb the hit.

Labour rights groups have welcomed the move, arguing that it puts pressure on New Delhi to enforce existing laws more strictly. They point to reports of forced labour in brick kilns, garment factories, and tea plantations. However, critics say the tariff is a blunt instrument that punishes workers and businesses rather than the specific violators.

What the Tariff Covers

• A blanket 10% tariff on all Indian goods entering the US.
• Higher rates for countries with what the US calls “systemic and egregious” forced labour.
• No exemptions for essential goods like medicines, though US health agencies are reviewing waivers.

What to Watch: Next Steps for India

India has three main options. First, bilateral negotiations. New Delhi is expected to send a high-level trade team to Washington in the coming weeks to seek a rollback. The US has indicated it could suspend tariffs if India demonstrates measurable progress in enforcement.

Second, India could challenge the tariffs at the World Trade Organization. Legal experts say the US action may violate WTO rules that require tariffs to be based on product-specific evidence, not broad country-level allegations. But WTO disputes take years, and New Delhi may not want to pick a fight with Washington while other trade deals are pending.

Third, India could retaliate with its own tariffs on US goods. New Delhi did this in 2019 when the US raised steel and aluminium duties. However, such moves risk a trade war that neither economy can afford right now.

Domestically, the government is under pressure to strengthen labour inspections and modernise laws. The Ministry of Labour is reportedly drafting amendments to the Code on Wages and the Occupational Safety, Health and Working Conditions Code to address gaps that the US has flagged.

The coming weeks will determine whether this becomes a protracted trade conflict or a catalyst for reform. For Indian exporters, the only certainty is that their costs just went up.