India-US Trade Update: USTR completes probe against India, other economies

The Commerce and Industry Ministry said on Wednesday that India remains engaged with the US in its Section 301 proceedings and for finalisation of a framework agreement. The nation 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 noted that the United States Trade Representative (USTR) -- a Cabinet-level agency within the POTUS's Executive Office -- has completed its probe against 60 economies, including India. Section 301 probe enables the agency to study measures undertaken by foreign countries to prevent the import of its goods.

The USTR is the apex American body responsible for developing, coordinating and implementing US international trade policy.

It has proposed imposing additional tariffs on imports from the 60 economies under Section 301 of the 1974 US Trade Act -- a crucial legislation that grants the US president power to negotiate international trade pacts, lower import barriers and counter any foreign trade practices understood to be unfair for the American economy.

Products covered under Section 232 tariffs and certain other products are excluded from these tariff proposals, said the trade ministry. "A special mechanism has also been proposed for textile and apparel products that could allow a certain volume of imports from selected economies to enter the US at lower tariff rates," it noted.

The ministry also stated that the proposed tariffs are not yet final, and the USTR has invited stakeholders to submit requests to participate in public hearings by June 22 or submit comments in writing by July 6.

Public hearings on the matter will be held on July 7, according to the release.

The USTR will consider the comments and testimony received before taking a final decision on the proposed measures, it noted.

What is a Section 301 investigation?

Section 301 is a provision under Sections 301-310 of the US Trade Act aimed at securing relief for the US economy from unfair trade practices. It authorises the USTR to investigate whether foreign countries' acts or policies are unjustifiable, unreasonable or discriminatory for the American economy.

It also empowers the US government body to take unilateral retaliatory action to counter these practices, including , including tariffs, import restrictions or the suspension of trade concessions. Upon detecting violations, it can use these powers on behalf of the US government to remove unfair foreign trade practices without Congressional approval.

The USTR formally launched the Section 301 probe against India and several other economies in mid-March, citing data pointing to mixed economic effects of tariffs on the US economy. The investigation examined what the USTR described as excess production capacity in manufacturing sectors across 16 major trading partners, including India, China, the EU, Japan, South Korea, Vietnam and Taiwan. That investigation followed a March 2026 US Supreme Court ruling that struck down the Donald Trump 2.0 administration's earlier tariff strategy, prompting his office to explore alternative legal routes to maintain its trade policy.

It came during active talks between the US and several partner countries, adding another layer of pressure to ongoing discussions. Separately, the USTR rolled out another Section 301 investigation covering 60 economies and focusing on alleged forced-labour-related trade practices.

Key areas covered under probe

The American body investigates several industries -- including steel, aluminium, automobiles, electronics, chemicals, machinery, semiconductors and solar modules -- and a range of aspects in this regard, including:

• Government subsidies and any other type of financial aid
• Activities of state-owned enterprises
• Subsidised lending to manufacturers
• Wage and labour standards
• Currency-related practices
• Environmental regulations
• Market-access barriers

When did Section 301 investigations gain prominence?

It first gained widespread attention during the 2018-2020 US-China trade war, when Washington slapped tariffs on hundreds of billions of dollars worth of Chinese goods.

Rather than focusing primarily on China, the 2026 probe extended scrutiny to allies and major trading partners, reflecting a wider effort to address perceived trade imbalances and industrial policy concerns.