New Delhi, June 4 -- The US on Wednesday proposed a 12.5% additional tariff on Indian goods, allegedly produced with forced labour, but New Delhi said the matter is still under discussion and could be resolved either through a mechanism involving the US Trade Representative's (USTR's) office or the ongoing bilateral trade negotiations. The USTR proposed an additional duty of 12.5% on goods imported from 54 countries including India accusing them of using forced labour, terming this "unreasonable" and restrictive of the US' own trade, and, therefore, "actionable under Section 301(b) of the Trade Act". The 12.5% is proposed to replace the current 10% additional duty imposed by the Trump administration after the US Supreme Court ruled the reciprocal tariffs levied by the US last April were illegal. the 10% additional tariff is set to expire on July 24. India's trade negotiators are in talks with a visiting US team led by assistant USTR Brendan Lynch to finalise an interim bilateral trade agreement (BTA), and some experts believe the USTR's action could be an attempt to get India to agree to certain terms. While that may be in the realm of the hypothetical, the Section 301(b) tariffs do seem to be an effort by the US to have some tariffs in place by the July cut-off for the existing tariffs. The USTR on Wednesday, also proposed a lower levy of 10% on six countries, including Pakistan and Indonesia, recognising that these had taken partial action against the forced labour. The 2.5% price differential is a disadvantage for Indian exporters as Pakistan and Indonesia compete with India in the US market, experts said. The commerce ministry said in a statement that "India remains engaged with the US on Section 301 proceedings and for finalisation of a framework agreement." "The United States Trade Representative (USTR) has concluded investigations against 60 economies, including India, regarding measures of these economies to prevent the import of goods. As a result, the USTR has proposed imposing additional tariffs on imports from the 60 economies under Section 301 of the U.S. Trade Act of 1974," the ministry said. "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 ministry said."...