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Section 301 explained: The US trade law worrying India
02 Jun 2026

As the US and India inch closer to a trade deal, New Delhi has sought protection from possible tariffs under Section 301 of the US Trade Act.

The move comes after Washington's shift toward alternative trade enforcement mechanisms following the US Supreme Court's decision to strike down President Donald Trump's reciprocal tariffs.

Section 301 gives the United States broad authority to investigate foreign trade practices and impose retaliatory measures without waiting for any adjudication.

US investigating India's trade practices
Trade apprehensions

The Office of the United States Trade Representative (USTR) is currently investigating several economies, including India.

These investigations could impact some of India's most critical export sectors.

A US delegation led by Assistant US Trade Representative for South and Central Asia Brendan Lynch recently visited New Delhi to continue talks on this issue.

Shift in Trump's tariff strategy
Legal implications

The US Supreme Court's decision to strike down Trump's reciprocal tariffs has significantly altered the course of trade negotiations.

It removed one of Washington's main legal tools for imposing broad tariffs on trading partners.

In response, the administration turned to existing trade statutes like Section 301 of the Trade Act of 1974, which empowers the USTR to investigate foreign government actions that may unfairly affect American commercial interests.

What does Section 301 say?
Enforcement powers

Section 301 allows the USTR to investigate if another country's conduct violates trade agreements, discriminates against US businesses, restricts market access, or creates conditions that disadvantage American industries.

The law has been used to address various grievances such as intellectual property theft, forced technology transfers, labor rights concerns, barriers to foreign market access, and discriminatory regulatory practices.

One of its significant features is that it allows the United States to act independently without consultations or appeals like in WTO disputes.

What happens if the USTR makes an affirmative determination?
Retaliatory measures

If the USTR makes an affirmative determination, the US administration can take various actions.

These include imposing additional customs duties, restricting imports through quotas or licensing requirements, withdrawing trade benefits, or suspending concessions previously granted to another country.

Because of these powers, Section 301 is often viewed as one of the strongest unilateral trade enforcement tools available to the US government.

USTR probes several countries under Section 301
Global scrutiny

In March, the USTR launched a series of Section 301 investigations against several trading partners including India, China, Japan, Brazil, the European Union and Singapore.

The probes focus on two broad areas: structural excess capacity in manufacturing and enforcement of measures to keep goods made with forced labor out of supply chains.

These investigations cover a wide range of countries and industries.

India has trade surplus with US
Trade imbalance

India had a goods trade surplus of about $58 billion with the US in 2025.

The USTR investigations also flag sectors where excess manufacturing capacity or state-supported expansion is suspected, including textiles and apparel, automotive products, steel and primary metals, petrochemicals, chemicals construction-related goods etc.

India has rejected the allegations, arguing that the investigations lack sufficient justification.

Because the targeted sectors represent a major portion of India's exports to the US, the outcome remains critical for domestic manufacturers and exporters.