The US is in the process of releasing its final decision on the Section 301 tariffs where it has proposed a 12.5% tariff on India. India is engaged with the US on the issue as both sides are negotiating a bilateral trade agreement (BTA).
Also read: India defends itself against US forced labour charges; seeks resolution via trade talks as Trump tariffs loom
Amending the Foreign Trade Policy (FTP) 2023, the Directorate General of Foreign Trade (DGFT) has inserted a paragraph as per which “the import of goods produced or manufactured, wholly or in part, through the use of forced labour is prohibited.”
The notification said, ‘forced labour’ means “all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily, as defined under the ILO Forced Labour Convention, 1930”. The provisions of the notification shall come into effect after the expiry of 30 days from the date of its publication in the official gazette, it stated.
“The products will be decided basis any complaints made by industry,” said an official.
According to the DGFT notification, the central government can issue a notification at any time to ban the import of specific goods if it finds, based on an inquiry or any other relevant evidence, that those goods have been produced using forced labour. The procedure for conducting an enquiry by the DGFT into the use of forced labour in the production of such goods will be as prescribed in the Handbook of Procedures, 2023.Trade experts said the order establishes a legal framework rather than an immediate import ban whose effectiveness will depend on how the government conducts investigations, the evidence required to establish forced labour, and the products it ultimately targets.
“The 30-day delayed commencement and DGFT-administered enquiry process gives India room to calibrate scope and pace. It converts this instrument into a reciprocal, rules-based instrument potentially usable in future BTAs, that is arguably WTO-consistent,” said Agneshwar Sen, Trade Policy Leader, EY India.
“Thirty days gives enough time to know how the US tariff policy will evolve. However, this policy development marks a significant step as attempts to link trade with labour concerns had been seen as efforts to introduce non-trade subjects into trade policy discussions,” said a trade expert.