India Among Nations Facing 12.5% Additional Tariffs From USA

Added: 2026-06-03

[00:00:00]Now President Trump has threatened a fresh round of tariffs proposing additional duties on 60 countries under laws targeting alleged unfair trade practices. While those countries face a 10% additional tariff levy, India, UK, Brazil, China, and Japan are among the nations that could be subjected to a higher 12.5% levy. Ashmi joins us now to explain to us what is being proposed by the USTR and its implications. Ashmi, many thanks for joining us.

[00:00:29]Uh you know, this is about uh new penalties, new tariffs that the US is looking to impose. We do want to point out that this is only a proposal at this stage, but what is the basis for this tariff?

[00:00:42]>> Well, even before the US delegates landed in the national capital for finalizing what both sides are calling the last 1% of the interim trade deal, there were still concerns being expressed within the Indian policy maker circle. Uh the concerns with respect to what will happen of the Section 301 investigations. Will India potentially be looking at additional tariffs? Well, let's break that down for the benefit of our viewers. Section 301 of the US Trade Act, it empowers the US government to investigate other countries like India for any practices that adversely affect US commerce. And if there are practices which are found to be discriminating against US commerce, well, in that case the US government is empowered under the Section 301 Act to levy additional tariffs. Now, importantly, there were two such investigations that were instituted against India as well as other countries in March of 2026. Uh this is the result. This is the finding of one of those investigations. And importantly, uh this investigation has concluded that India does not have enough safeguards to protect against imports to prohibit imports from countries which allow forced labor.

[00:01:47]Therefore, it discriminates against US commerce and therefore this is a fit case for levy of an additional tariff.

[00:01:53]This is the finding that the USTR has made. Now, importantly, there were a total of 60 countries that were subject of this investigation.

[00:02:01]Basis the level of deployment of safeguards, these countries were put in two baskets. The first is the 10% basket, which includes countries like UK, Indonesia, EU, Pakistan, Mexico, Argentina. This is the first basket. India does not come in this. India, unfortunately, falls in the second basket, which is the 12 and 1/2% basket. This basket includes countries such as India, China, Vietnam, Brazil, Japan, and they're all looking at 12 and 1/2% levy. But, what's important to bear in mind are three critical aspects.

[00:02:31]Number one, this is only a proposal at this stage. This is only a recommendation. The 301 investigations have a long, tedious process. There's first the request to appear for a public hearing, then the written documents are filed, then a public hearing takes place, and only after that is there a final conclusion on whether or not there will be a final levy imposed, which the exporters in India will need to worry about. Second, and this is equally important. This What we saw today, what the finding that we came out of USTR was with respect to only one of the two investigations.

[00:03:02]There is also a second investigation, which is underway, which is on the issue of structural overcapacity in areas such as steel, aluminum, food processing, and solar. We have no idea what that will yield, what that will return into, and that is something which we spoke to many experts say is a case of Washington keeping the powder dry to apply pressure on India as and when these trade trade negotiations proceed. And speaking of trade negotiations, Brendan Lynch, leading the US delegation, is here negotiating with the Indian team. But, importantly, the Indian concerns have been voiced with respect to Section 301.

[00:03:35]The concern that India has is that India does not want to be left in a situation where it agrees upon a trade framework, it agrees upon a tariff, and then a few months years down the road additional tariffs are levied on India and Indian exporters. That is a situation that India is looking to avoid. India is looking for a special carve-out as a part of this bilateral trade agreement.

[00:03:56]Will it yield any results? Well, we'll continue to have our ears close to the ground for tracking the latest updates.

[00:04:03]>> Many thanks, Ashmith. And staying with trade in