SYLLABUS

GS-3: Effects of Liberalization on the Economy, Changes in Industrial Policy and their Effects on Industrial Growth. 

Context: The Government has amended the Foreign Trade Policy (FTP), 2023, to prohibit the import of goods that are produced, either wholly or partly, through the use of forced labour. 

More on the News

• A new Paragraph has been inserted in the FTP, 2023, prohibiting the import of goods produced or manufactured, wholly or partly, through the use of forced labour. 

• The amendment has been notified by the Directorate General of Foreign Trade (DGFT) and will come into force 30 days after its publication in the Official Gazette. 

• The Central Government has been empowered to prohibit the import of specified goods where an enquiry or other relevant material establishes that they have been produced using forced labour. 

• The procedure for conducting such enquiries has been prescribed through the insertion of a new paragraph in the Handbook of Procedures (HBP), 2023, under which the DGFT may initiate enquiries suo motu or based on credible information or complaints. 

• The amendment also defines "forced labour" in accordance with the ILO Forced Labour Convention, 1930 (Convention No. 29).

Why has India introduced this amendment now?

• Forced labour remains a significant concern in global supply chains, prompting several countries to strengthen import regulations and supply chain due diligence requirements. 

• The United States, European Union and other major economies have introduced measures to restrict market access for goods linked to forced labour, increasing compliance expectations for exporters. 

• Against this backdrop, India has introduced a domestic legal framework under the FTP, 2023 to prohibit imports of goods produced using forced labour and align its trade regime with evolving global standards on ethical trade.

Key Features of the Amendment

• Comprehensive Import Prohibition: The prohibition covers goods produced or manufactured wholly or partly through the use of forced labour. 

• Internationally Aligned Definition: Forced labour is defined as all work or service exacted from any person under the menace of any penalty and for which the person has not offered himself or herself voluntarily, consistent with the ILO Forced Labour Convention, 1930. 

• Investigation and Enforcement: The DGFT may conduct enquiries suo motu or on the basis of credible complaints or information. Based on the findings or other relevant material, the Central Government may notify specified goods whose import will be prohibited. 

• Prospective Implementation: The amendment will take effect 30 days after publication in the Official Gazette, providing time for importers to ensure compliance. 

Significance

• Promotes Ethical and Responsible Trade: Prevents the import of goods linked to exploitative labour practices and reinforces responsible business conduct. 

• Aligns with International Labour Standards: Harmonises India's trade policy with the ILO Forced Labour Convention, 1930, reflecting globally accepted labour rights principles. 

• Improves Regulatory Enforcement: Empowers the Government to investigate and prohibit imports linked to forced labour, strengthening enforcement against unethical trade practices. 

• Strengthens India's Position in Global Trade: Aligns India's trade framework with evolving international expectations on ethical sourcing and responsible supply chains, enhancing its credibility in trade negotiations and export markets.