Amendment to India's Foreign Trade Policy
India has revised its foreign trade policy to prohibit the import of goods produced using forced labour. This decision aligns with a US investigation targeting forced labour practices in 60 countries, including India.
Background and Context
- The US is considering the imposition of a 12.5% tariff on India under Section 301 tariffs.
- India is currently negotiating a Bilateral Trade Agreement (BTA) with the US.
Key Details of the Amendment
- The Directorate General of Foreign Trade (DGFT) has added a clause in the Foreign Trade Policy (FTP) 2023 prohibiting the import of goods produced through forced labour.
- The definition of forced labour follows the ILO Forced Labour Convention, 1930.
- The amendment will be effective 30 days post-publication in the official gazette.
- The central government retains the authority to ban imports of specific goods found to be produced using forced labour based on inquiries or evidence.
Procedural and Legal Framework
- The DGFT will conduct inquiries into forced labour usage as per the Handbook of Procedures, 2023.
- Trade experts view this as establishing a legal framework rather than an immediate import ban.
- The effectiveness hinges on investigation processes, evidence standards, and targeted products.
Strategic and Trade Implications
- Allows India to align its trade policy with labour concerns, potentially influencing future BTAs.
- This move is seen as a strategic instrument that is WTO-consistent.
- The 30-day delay provides India time to observe potential US tariff policy changes.
- Marks a significant shift as linking trade with labour concerns introduces non-trade subjects into trade policy discussions.
