Foreign Trade Policy: India’s Ban on Forced Labour Imports Explained

Subject: GS 3: Economy

Context: Recently, the Government of India has amended the Foreign Trade Policy (FTP) to prohibit the import of goods manufactured wholly or partly through forced labour. 

• The move comes amid the United States Trade Representative (USTR) proposing a 12.5% tariff on Indian exports under a Section 301 investigation concerning India’s enforcement of forced labour-related trade measures.

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Key Highlights

• Import Prohibition: The Directorate General of Foreign Trade (DGFT) has inserted a new provision in the Foreign Trade Policy (FTP) prohibiting the import of goods produced or manufactured wholly or in part through forced labour.

• Government Notification: The Central Government may notify specific goods for prohibition based on the findings of an enquiry or other relevant evidence.
• Enquiry Mechanism: The Director General of Foreign Trade (DGFT) will conduct enquiries into the use of forced labour, following the procedure prescribed under the Handbook of Procedures, 2023.

What is Forced Labour?

• According to the International Labour Organization (ILO), forced labour refers to any work or service extracted from a person under the threat of penalty and without voluntary consent.
• Background: In March 2026, the United States Trade Representative (USTR) initiated two Section 301 investigations against India.
  • Following the first investigation, the USTR proposed a 12.5% tariff on Indian exports, alleging that India had failed to effectively enforce restrictions on imports made using forced labour.
  • The second investigation, relating to excess industrial capacity, is yet to be concluded.

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Global Context

• United States: The USTR has initiated Section 301 investigations covering around 60 economies and has proposed tariffs on imports linked to forced labour.
• European Union: The EU has also introduced measures to restrict imports produced through forced labour.
• Global Focus: Products such as cotton, textiles, solar panels, seafood, metals, batteries, and electronics have come under increased scrutiny for potential links to forced labour, particularly in Xinjiang, China.

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