India Bans Imports of Forced Labor Products in Bid to Lower U.S. Tariffs

USTR Announced 12.5% Additional Tariffs on 46 Group Economies Last Month
India Continues to Protest Against the Tariff Plan

The Indian government has decided to ban imports of products made using forced labor. This move is part of India's efforts to lower the additional 12.5% tariffs that the United States recently announced it would impose on Indian products.

Indian Prime Minister Narendra Modi is speaking at an event held in Auckland, New Zealand, on the 11th (local time). Photo by EPA Yonhap News

According to the Times of India (TOI) and other sources on July 14 (local time), India's Ministry of Commerce and Industry has added a new provision to its Foreign Trade Policy (FTP) that bans the import of products produced wholly or partly by forced labor. The Ministry will designate banned items based on the findings of the Directorate General of Foreign Trade (DGFT), which operates under its jurisdiction. The new regulation will take effect in 30 days.

The Ministry of Commerce and Industry has adopted the International Labour Organization (ILO)'s definition of forced labor in its entirety for this import ban. The ILO defines forced labor as “work or service that is exacted from any person under the menace of any penalty and for which the person has not offered himself voluntarily.”

This action comes as the administration of U.S. President Donald Trump seeks to impose forced labor tariffs of up to 12.5%. The Office of the United States Trade Representative (USTR) announced on June 2 that it plans to levy an additional tariff of 10% or 12.5% on imports from 60 economic zones. Alongside India, South Korea, Japan, China, and Australia are included in the group of 46 economies subject to the 12.5% tariff. The United States determined that these countries have both failed to implement and effectively enforce import bans on goods produced with forced labor.

The Indian government has denied the U.S. claims and continues negotiations. On July 13, India's Commerce Secretary Rajesh Agrawal confirmed that India had submitted its position paper to the United States on this matter and had lodged a protest against the tariff plan.

Trade experts expect that this measure will strengthen India’s negotiating power with the United States. Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), said, “With this announcement, India can strengthen its position in trade negotiations and in negotiations for market access.”

There is also analysis suggesting that this measure represents a significant policy shift in India’s trade regime. Manoj Mishra, Partner at Grant Thornton Bharat, told The Hindu that “this move will strengthen India’s ethical sourcing regulations amidst increasing scrutiny of global supply chains.” However, he added that the real impact would depend on the enforcement and investigative mechanisms that the government establishes.

This content was produced with the assistance of AI translation services.