The Office of the US Trade Representative (USTR) has proposed a 12.5% tariff on India and 53 other countries, including China and Vietnam, following an investigation that concluded these nations did not adequately address the import of goods produced with forced labor. The USTR's report indicated that India's failure to enforce a prohibition on such imports burdens US commerce. Public comments on this proposal are invited until July 6, with hearings set for July 7. This tariff proposal comes as US and Indian officials are engaged in discussions regarding a Bilateral Trade Agreement (BTA). The interim trade deal, which includes a reciprocal tariff of 18% on Indian goods, is nearly finalized, according to Indian Commerce Minister Piyush Goyal. The US is India's top export destination, accounting for approximately 20% of India's total exports, with a trade surplus of $33.83 billion reported for the fiscal year 2025-26. Experts suggest that the proposed tariffs reflect a broader strategy by Washington to exert pressure on India through Section 301 investigations.