Amid US probe, India set to prohibit import of goods manufactured using forced labour

Amid an ongoing investigation by the US on imports of goods using forced labour by nearly 60 countries, India, too, has now issued guidelines prohibiting such imports. New Delhi has inserted a new paragraph in its Foreign Trade Policy.

To this effect, the Directorate General of Foreign Trade has notified guidelines prohibiting the import of goods produced or manufactured wholly or in part using forced labour.

The Central government may from time to time specify the goods whose imports shall be prohibited under this provision following findings of any inquiry or any material that may come up, it said.

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"Forced labour means all work or service which is exacted from any person under the menace of penalty and for which the said person has not offered himself voluntarily, as defined under the ILO Forced Labour Convention, 1930," the DGFT notification said.

The provision of the notification will come into effect after the expiry date from its publication, said the notification dated July 13. 

Experts noted that the DGFT notification has come at a time when the US has launched Section 301 investigations covering about 60 economies, including India, and has proposed a 12.5% tariff on imports from India and most other countries under review. The European Union and Pakistan are proposed to face a lower 10% tariff after introducing domestic measures to prohibit imports made with forced labour.

“Against this backdrop, India's notification signals that it is strengthening its domestic legal framework in line with international standards, a step that could strengthen its position in future trade negotiations and market-access discussions,” said Ajay Srivastava, founder of Global Trade Research Initiative.

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The order establishes a legal framework rather than an immediate import ban. Its effectiveness will depend on how the government conducts investigations, the evidence required to establish forced labor, and the products it ultimately targets, he said.

“US authorities consider products such as cotton, textiles, solar-panel polysilicon, seafood, metals, batteries and electronics vulnerable to forced-labour risks, particularly when linked to China's Xinjiang region,” he further said, while noting that the US and the EU continue to import many such products from China, underscoring the challenges of enforcing forced-labour rules.

Manoj Mishra, Partner and Tax Controversy Management Leader, Grant Thornton Bharat, said the introduction of a prohibition on imports of goods produced through forced labour marks a significant policy shift in India's trade framework.

“While India has so far relied largely on labour and criminal laws to address forced labour domestically, the foreign trade policy now incorporates a dedicated trade measure aligned with international standards under the ILO Forced Labour Convention,” he said.