Piyush Goyal plays down 12.5% US tariff threat, suggests India may get 'competitive edge'

Commerce and Industry Minister Piyush Goyal on Sunday downplayed concerns over a proposed US tariff action under Section 301 of the US Trade Act, saying Washington's move could ultimately create a comparative advantage for India.

He also expressed confidence that an interim bilateral trade deal between the two countries would be concluded soon.

Speaking at a Financial Express event in Mumbai, Goyal said the proposed tariff mechanism was being developed by the United States amid domestic constraints on imposing reciprocal tariffs and should not be viewed as a major concern for India.

"They are trying to create a competitive edge for India. So I don't think we need to worry about Section 301. We'll tackle it, it's our responsibility," he said.

Under the proposal, India is among 54 economies that could face an additional tariff of 12.5% as the USTR concluded that they neither prohibit nor effectively enforce restrictions on imports of goods made with forced labour. Countries with partial regimes or commitments in place would face an additional duty of 10%.

The USTR launched the investigations in March under Section 301 of the US Trade Act of 1974 and said the identified practices burden or restrict US commerce.

Without naming China, Goyal said the investigation was “directed at a particular country” and indicated that India would safeguard its interests during ongoing engagements with Washington.

"We will protect India's interests and I'm very confident that the deal will come through. It'll be a good deal," he said.

The minister also said US Trade Representative Jamieson Greer is expected to visit India within the next two weeks for further discussions on the proposed India-US interim trade agreement.

India and the US concluded another round of negotiations on the proposed bilateral trade agreement in New Delhi last week, with both sides indicating that talks had entered the final phase.

The Commerce Ministry described the discussions as "constructive and positive", covering areas such as trade in goods, non-tariff measures, customs and trade facilitation, and economic security alignment.

According to the ministry, both countries reaffirmed their commitment to concluding a mutually beneficial agreement that would strengthen bilateral trade and economic ties.

Goyal reiterated that India would continue to pursue "fair and equitable trade" and that any agreement signed by the country would be balanced.

He also stressed that India does not negotiate under externally imposed deadlines.

Earlier, the minister had indicated that an interim trade agreement with the United States could be reached by July.

The latest USTR probe is being viewed as part of the Donald Trump administration's efforts to explore alternative tariff tools after a recent US Supreme Court ruling curtailed the President's authority to impose sweeping tariffs without congressional approval.

The USTR has invited written comments on the proposed action by July 6 and will hold public hearings on July 7 before taking a final decision on the tariff proposal.