Understanding the Importance of India’s Ban on Goods Produced with Forced Labor
Amid ongoing scrutiny from the United States, India has revised its Foreign Trade Policy (FTP) to prohibit the import of goods produced wholly or partly through forced labour. This amendment follows a Section 301 investigation by the U.S. Trade Representative (USTR) into forced labour practices across 60 economies, including India. The Directorate General of Foreign Trade (DGFT) issued a gazette notification on July 13, stating that the new provisions will take effect 30 days after publication.
The notification specifies that the central government can prohibit the import of specific goods if evidence suggests they were produced using forced labour. The DGFT will outline the inquiry procedures in the Handbook of Procedures, 2023. The amendment also defines “Forced Labour” in accordance with the ILO Forced Labour Convention, 1930.
What is the Section 301 probe by the US?
The USTR’s Section 301 investigations target 60 economies, including India, over concerns regarding the enforcement of bans on goods made with forced labour. On June 3, the U.S. proposed a 12.5% tariff on imports from 54 economies, including India, for failing to prohibit such imports. Other countries, including Canada and the European Union, face an additional 10% import duty.
India is currently in discussions with the U.S. as both nations negotiate a bilateral trade agreement.
India’s stand on Section 301 investigations
India has challenged the U.S. proposal for additional tariffs, arguing that the American approach lacks consistency and should be addressed through bilateral negotiations. Brij Mohan Mishra, Joint Secretary in the Ministry of Commerce, recently questioned the rationale behind the proposed tariffs during a USTR panel meeting.
Mishra pointed out that the USTR excludes around 1,600 products that cannot be manufactured in the U.S. from scrutiny related to forced labour. He criticized the U.S. policy of offering lower tariff rates for textile products made with U.S.-origin inputs, stating that it undermines the goal of addressing forced labour in global supply chains.
Why the move on forced labour is significant
Experts view India’s new policy as a notable shift in its trade framework. Manoj Mishra from Grant Thornton Bharat notes that while India has relied on domestic laws to combat forced labour, the FTP now aligns with international standards. He emphasizes that the effectiveness of this policy will depend on the implementation framework outlined in the Handbook of Procedures.
Ajay Srivastava, founder of the Global Trade Research Initiative, calls the notification a sensible first step but stresses that its credibility hinges on enforcement. He highlights the challenges of proving forced labour in complex, multi-country supply chains and urges India to develop robust traceability systems to protect legitimate trade.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
