Here is what the change means:
What is forced labour?
According to the International Labour Organisation‘s (ILO) Forced Labour Convention, 1930, forced labour refers to any work or service extracted from a person under the threat of a penalty and for which that person has not volunteered.
Why has this become a major trade issue?
Countries are increasingly tightening restrictions on products linked to abusive supply chains.
The US has launched Section 301 investigations against 60 economies, including India, while the European Union has adopted rules to block or remove products made using forced labour from its market, according to the Global Trade Research Initiative (GTRI).
Which countries have banned imports made using forced labour?
The United States, Canada and Mexico already prohibit such imports. The European Union has also adopted a Forced Labour Regulation.
With the latest amendment, India has created a legal framework to impose similar restrictions through its Foreign Trade Policy.Also Read| India to ban imports of goods made using forced labour; DGFT notifies new trade rules
Why is forced labour linked to trade?
Goods made using forced labour can be produced at lower costs, making them cheaper than products manufactured under fair labour conditions.
As a result, governments increasingly view forced labour not only as a human rights issue but also as an unfair trade practice that distorts competition.
What is the US Section 301 investigation?
In March 2026, the US Trade Representative (USTR) launched investigations into 60 economies, including India, alleging that they had failed to adopt or effectively enforce bans on imports made using forced labour.
In June, the USTR proposed additional tariffs of 12.5% on 54 countries, including India, while proposing 10% tariffs on countries such as Pakistan, Canada and members of the European Union.
What is India’s position?
India has said eliminating forced labour is a constitutional obligation, an international commitment and a matter of principle.
It has also argued that the USTR has not established sufficient evidence linking the absence of a forced labour import ban with harm to US commerce.
According to India’s response, there is “inadequate and insufficient evidence” that the lack of such a ban gives Indian products an unfair competitive advantage over US industry.
What has changed in India’s Foreign Trade Policy?
The Directorate General of Foreign Trade (DGFT) has inserted a new provision into the Foreign Trade Policy, 2023.
The amendment empowers the central government to prohibit, through separate notifications, the import of goods produced or manufactured, wholly or partly, using forced labour.
Does this mean such imports are banned immediately?
No.
The notification creates the legal framework rather than imposing an immediate blanket ban.
Under the new mechanism, the DGFT can investigate complaints, seek information and recommend restrictions. The government can then prohibit specific products through separate notifications.
Did India earlier have no law on forced labour?
India already prohibited forced labour within the country under existing domestic laws.
However, according to GTRI founder Ajay Srivastava, there was no explicit trade policy provision to block imports made using forced labour outside India. The latest amendment addresses that gap.
Why is the notification significant?
According to GTRI, the amendment aims to:
- Align India’s trade rules with international labour standards
- Prevent imports linked to forced labour
- Strengthen the credibility of India’s supply chains
- Improve India’s position in global trade negotiations
Will this help India in trade talks with the US?
GTRI said the move could strengthen India’s position by addressing one of the concerns raised in the US Section 301 investigation.
However, it cautioned that the amendment alone is unlikely to resolve the dispute or ensure relief from the proposed US tariffs, as the Section 301 investigation and the proposed India-US trade agreement are separate processes. Washington may continue pursuing tariffs based on its own assessment of enforcement and other trade concerns.