Public hearings for the proposal will begin on July 7.
The proposal is part of a broader US action following a Section 301 investigation into forced-labour practices.
The development comes as a US trade delegation is in New Delhi for what is expected to be the final round of negotiations for the first tranche of a bilateral trade agreement (BTA). They are in India from June 2 to June 4.
The USTR said imports from countries that have imposed and enforced forced-labour import prohibitions, committed to doing so through trade agreements, or operate partial regimes would face an additional 10% duty.
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Countries proposed to face the lower 10% tariff include the European Union, Mexico, Indonesia, Pakistan, Bangladesh, Cambodia, Malaysia, Taiwan, Argentina, Ecuador, El Salvador and Guatemala.
At 12.5%, India is among a group of countries proposed to face the higher additional duty, alongside China, Japan, South Korea, Brazil and Switzerland.
The USTR found that India had failed to impose and effectively enforce a forced-labour import prohibition, saying the failure was “unreasonable” and burdens or restricts US commerce.
India’s Commerce Ministry has said the country is engaged with the US on the matter. “India is also parallelly engaged with the US for finalisation of a framework agreement as was announced on February 2 and in accordance with the joint statement released on February 7,” the ministry said.
The USTR said its investigation found that 54 economies had failed to prevent the import of goods made with forced labour.
The USTR has also proposed a textile mechanism that would allow a certain volume of apparel and textile imports from some economies to enter the US at reduced Section 301 tariff rates. India is a major textile exporter.
Experts had warned of the trade action even if a deal is signed.
“Section 301 gives the United States administration powers under the 1974 Trade Act to investigate alleged conscious efforts made by countries to promote their exports,” former Commerce Secretary Ajay Dua told CNBC-TV18
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(Edited by : Tenzin Norzom)
