Why is the U.S. investigating India? | Explained

The U.S. has launched two investigations under Section 301 of the Trade Act of 1974 against India and other economies to examine practices that may be ‘unreasonable or discriminatory and burden or restrict U.S. commerce’. One probe examines whether countries, including India, are using excess manufacturing capacity to export to the U.S. in a manner that hurts American businesses, while another looks at whether countries have taken ‘sufficient steps’ to prohibit imports of goods produced with forced labour.

The story so far

Over the last week, the U.S. government has launched two investigations against India and several other countries in a bid to find some form of actions or policies that “are unreasonable or discriminatory and burden or restrict U.S. commerce”. These investigations will likely take a few months, but could eventually result in the return of tariffs.

The U.S. Supreme Court on February 20 ruled against the validity of U.S. President Donald Trump’s use of the International Emergency Economic Powers Act (IEEPA) to levy reciprocal tariffs on America’s trade partners. For India, these reciprocal tariffs had been 50% from August 2025 to February 6, 2026, after which Mr. Trump reduced them to 25%.

Following the court’s decision, Mr. Trump imposed a 10% tariff on imports from all countries for a period of 150 days under Section 122 of the Trade Act of 1974. He threatened to increase this to 15%, but has not done so.

However, he said the U.S. would use other sections of the Trade Act to levy additional tariffs.

On March 11, the office of the U.S. Trade Representative (USTR) said it had initiated investigations against 16 economies, including India, to see whether these economies were using excess manufacturing capacity to export to the U.S. in a manner that was hurting American businesses.