India Takes a Stand Against Forced Labour in Trade Policy Amid US Scrutiny

In a significant move, the Indian government has amended its foreign trade policy to prohibit the import of goods produced using forced labour. This decision comes amid ongoing US investigations into forced labour practices in 60 countries, including India. The new policy empowers the government to ban specific goods based on future investigations by the Directorate General of Foreign Trade (DGFT). While the amendment does not impose immediate bans, it signals India's commitment to aligning its trade practices with international standards. Experts believe this could enhance India's position in future trade negotiations. The policy's effectiveness will depend on the government's investigative processes and the evidence required to establish forced labour in supply chains.

By Narendra Chaudhary Jul 14, 2026, 19:18 IST

New Trade Policy Amendment Targets Forced Labour

New Delhi: The Indian government has revised its foreign trade policy to ban the import of goods produced through forced labour, coinciding with a US investigation into forced labour practices across 60 nations, including India.

The Directorate General of Foreign Trade (DGFT) has updated the Foreign Trade Policy (FTP) 2023, stating that "the import of goods produced or manufactured, wholly or in part, through the use of forced labour is prohibited," as per a gazette notification issued on July 13.

This notification does not impose an immediate ban on specific products or imports from any country. Instead, it grants the government the authority to prohibit certain goods in the future based on investigations conducted by the DGFT.

The new provisions will take effect 30 days after their publication in the official gazette.

This move comes as the US Trade Representative (USTR) conducts Section 301 investigations against 60 economies, including India, due to concerns regarding their enforcement of import bans on goods made with forced labour.

On June 3, the US proposed imposing a 12.5% tariff on 54 countries, including India, for allegedly not prohibiting the import of goods produced with forced labour.

Countries like Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan will face an additional 10% import duty as they have implemented domestic measures to ban imports made with forced labour.

According to the DGFT notification, the central government can issue a ban on specific goods at any time if it finds evidence that those goods were produced using forced labour.

The DGFT will follow the procedures outlined in the Handbook of Procedures, 2023, for conducting inquiries into the use of forced labour in the production of such goods.

Additionally, the DGFT has defined "Forced Labour" under Chapter 11 of the FTP, 2023, as any work or service extracted from a person under threat of penalty, as per the ILO Forced Labour Convention, 1930 (No. 29).

India is currently in discussions with the US regarding this issue as both nations negotiate a bilateral trade agreement.

Commenting on this development, think tank GTRI noted that the order establishes a legal framework rather than an immediate import ban.

"The effectiveness of this policy will depend on how the government conducts investigations, the evidence required to prove forced labour, and the specific products targeted," said GTRI Founder Ajay Srivastava.

He added that India's notification indicates a strengthening of its domestic legal framework in line with international standards, potentially enhancing its position in future trade negotiations.

US authorities have identified products such as cotton, textiles, solar-panel polysilicon, seafood, metals, batteries, and electronics as particularly vulnerable to forced-labour risks, especially those linked to China's Xinjiang region.

"However, the US and the EU continue to import many such products from China, highlighting the challenges in enforcing forced-labour regulations," Srivastava remarked.

Agneshwar Sen, Trade Policy Leader at EY India, emphasized that by adopting the ILO Forced Labour Convention, 1930 (No. 29) definition, India aligns itself with the same international standards invoked by the US domestically.

"This is a principled stance: India is not just countering US allegations; it is asserting its capability to regulate forced labour in its supply chains, including goods produced through prison or bonded labour, not just those flagged by the US," Sen concluded.