New Delhi, June 4 -- At a time when India and the US are reportedly close to clinching a bilateral trade agreement (BTA), the latter has proposed a fresh set of tariffs that could take effect soon. Mint takes a closer look at the new tariff, its legality and motivation behind it.

The US has proposed to impose 12.5% tariff on imports from India under Section 301 of the Trade Act of 1974. This follows two investigations launched by the office of the United States Trade Representative (USTR) in March-one on the use of forced labour and another on excess industrial capacity. The tariff, it said, is for "failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labour." The US government has soug...