International Trade Update No. 15

India formally prohibits forced labour imports amid global regulatory shifts

Against the backdrop of on-going U.S. Trade Representative (“USTR”)’s Section 301 investigations into the forced-labour import regimes of 60 economies, India has introduced an express legal framework to restrict imports of goods produced using forced labour.

Brief background

On 2 June 2026, USTR determined that the practices of all 60 investigated economies were actionable under Section 301 of the US Trade Act of 1974. It proposed an additional tariff of 10% for economies maintaining a forced-labour import prohibition, related trade commitments or a partial preventive regime (which included Canada, Mexico, Pakistan, and EU), and 12.5% for other economies, including India. These remain proposed measures, with final tariff action awaited.

Notification prohibiting import of goods using forced labour

Pursuant to this, the Government of India has now issued Notification No. 23/2026-27 dated 13 July 2026, inserting paragraphs 2.20B and 11.64 into the Foreign Trade Policy 2023.

Goods produced or manufactured, wholly or partly, using forced labour may be prohibited from import.
Specific goods will be identified through subsequent government notifications, based on an enquiry or other relevant material.
DGFT’s enquiry procedure will be prescribed separately in the Handbook of Procedures.
“Forced labour” has been defined consistently with the ILO Forced Labour Convention, 1930.

“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 or herself voluntarily”.

The amendment takes effect after 30 days from its publication in the Official Gazette. The Gazette notification is presently awaited.

LKS Comments:

This amendment marks a significant shift in India’s trade compliance framework by introducing a dedicated import prohibition for goods produced using forced labour. While the Notification does not immediately ban any identified product, sector or country, it lays the legal foundation for future product-specific import restrictions.

The prohibition extends to goods manufactured wholly or in part through forced labour, highlighting the need for businesses to assess risks across their entire supply chain, including upstream raw materials and components. As the detailed implementation framework is expected through future DGFT notifications and the changes in Handbook of Procedures, importers should proactively review their sourcing arrangements, strengthen their supplier/vendor due diligence and contractual safeguards, and undertake an internal supply-chain assessment to ensure that their imports are not exposed to future restrictions arising from forced labour concerns.