Overview
- The Directorate General of Foreign Trade published a gazette notification inserting Paragraph 2.20B into the Foreign Trade Policy on July 13 that forbids the import of goods produced wholly or partly with forced labour and that will come into force 30 days after publication.
- The change adopts the International Labour Organisation’s 1930 definition of forced labour and gives the central government power to prohibit particular products after DGFT inquiries or other relevant evidence is found.
- DGFT will set the standards and procedures for those inquiries in the Handbook of Procedures, so the measure creates a legal framework rather than an immediate, product-specific ban.
- The move directly responds to the U.S. Trade Representative’s Section 301 probe and a proposed additional 12.5% tariff on India, but the USTR’s final decision and any tariff actions remain pending.
- The policy’s real impact will depend on enforcement, the evidentiary rules DGFT adopts, and the ability to trace complex cross-border supply chains, with consequences for exporters, bilateral talks, and possible legal or WTO challenges.