Centre bans imports of goods made with forced labour amid US tariff probe, tightens trade rules

THe Centre has prohibited the importee of goods produced whole or partly through and through forced labour, strengthening republic of india’s trade rules as it seeks to address concerns raised by the United States in an ongoing Section 301 investigation that could result in an additional 12.5% tariff on Indian exports.The Directorate General of Foreign Trade (DGFT) issued the notification on Monday after approval from commerce and industry minister Piyush Goyal. The provision will become part of the Foreign Trade Policy (FTP) after 30 days.Also Read| ‘Completely false’, ‘fake news’: Piyush Goyal, Sergio Gor slam report saying ‘India rejected quick trade deal with US’“The import of goods produced or manufactured, wholly or in part, through the use of forced labour is prohibited,” the notification issued on July 13 said. This empowers the central government to specify such goods from time to time after enquiry.The procedure for conducting an enquiry by DGFT into the use of forced labour in the production of such goods shall be as prescribed in the Handbook of Procedures, 2023, the notification said.The notification adds a paragraph in the FTP to empower the central government to prohibit, by notification, the import of goods produced or manufactured, wholly or in part, through the use of forced labour. It also inserts another paragraph “Forced Labour” in accordance with the ILO Forced Labour Convention, 1930 (No. 29), thereby strengthening the FTP framework for restricting imports of goods produced through forced labour, it added.As defined under the International Labour Organisation (ILO), 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, it said.The move comes against the backdrop of a Section 301 investigation launched by the Office of the United States Trade Representative (USTR), which cited the absence of an explicit prohibition on imports made with forced labour as one of the reasons for initiating the probe.The USTR launched the investigation on March 12 covering 60 countries, including India. On June 2, it proposed imposing an additional 12.5% tariff on goods from 54 countries, including India, over concerns relating to forced labour. Six other countries, including Indonesia and Pakistan, face a proposed additional duty of 10%.India has consistently rejected the allegations. It has maintained that New Delhi and Washington are addressing the issue as part of negotiations on a bilateral trade agreement and argued that the mere possibility of products made with forced labour entering a country’s territory does not amount to official approval of such practices.In its submission to the USTR on May 7, India said there was no conclusive evidence that it either imports or exports goods produced using forced labour.In the latest hearing of the USTR on July 8, the Indian representative submitted that the elimination of forced labor is a constitutional obligation of the government. The “absence of an explicit forced labor importation ban does not constitute acquiescing to or permitting forced labor in any form,” the representative said in the latest public hearing in connection with the Section 301 investigations.A final verdict of the USTR on this matter is awaited.