India Introduces Procedure to Examine Imports Made with Forced Labour: A Major Shift in Ethical Trade Policy.

On 13 July 2026, the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry issued Public Notice No. 21/2026-27, inserting a new Paragraph 2.50A into the Handbook of Procedures (HBP), 2023. The notification establishes, for the first time, a formal mechanism to investigate whether imported goods entering India have been produced wholly or partly through forced labour.

Although the notification does not immediately prohibit any product or country, it creates the legal and procedural framework through which India can examine allegations of forced labour and recommend import restrictions where warranted. This marks a significant development in India's evolving trade governance and reflects changing global expectations regarding responsible supply chains.

What the Public Notice Provides?

The newly inserted Para 2.50A authorizes the DGFT to investigate imported goods suspected of having been produced using forced labour. The procedure contains five principal features:

1. Initiation of Inquiry - The DGFT may initiate an investigation:

• on its own (suo motu), or
• upon receiving a complaint supported by credible evidence.

This allows investigations even where no formal application has been filed by domestic industry.

2. Collection of Information - The DGFT may seek:

• documents,
• production records,
• certifications,
• declarations,
• supply chain information,

from:

• importers,
• exporters,
• manufacturers,
• any other relevant authority.

Importers may therefore be required to demonstrate that their overseas suppliers are not using forced labour.

3. Consultation with Government Agencies - During investigation, DGFT may consult:

• Central Ministries,
• Government Departments,
• regulatory authorities,
• other stakeholders.

This allows coordinated examination involving labour, customs, commerce, foreign affairs and other agencies.

4. International Inputs - The notification also authorizes DGFT to obtain technical information from:

• international organizations,
• foreign governments,
• expert institutions,
• independent bodies.

This provision is particularly important because forced labour investigations often rely upon international evidence, satellite data, labour audits, NGO reports and supply-chain tracing.

5. Recommendations to Government - After completing the inquiry, DGFT prepares a report and may recommend:

• prohibition of imports,
• restrictions under the Foreign Trade Policy,
• action under the Foreign Trade (Development and Regulation) Act, 1992.

Thus, the notification creates an investigative mechanism rather than an automatic ban.

Why Was This Notification Introduced?

The timing reflects significant developments in global trade policy. Over the last decade, forced labour has emerged as one of the most important issues in international trade. Governments increasingly require importers to ensure that products entering their markets are not linked to:

• forced labour,
• modern slavery,
• debt bondage,
• child labour,
• state-sponsored labour programmes.

Consumers, investors and multinational companies now demand greater transparency in global supply chains. India's notification aligns its trade administration with these emerging global norms.

Understanding Forced Labour

The International Labour Organization (ILO) defines forced labour as: Work performed involuntarily under threat, coercion, intimidation, deception or abuse of vulnerability. Forced labour includes situations where workers cannot freely leave employment because of:

• threats,
• confiscation of identity documents,
• debt,
• violence,
• restrictions on movement,
• intimidation.

It differs from ordinary labour law violations because coercion is a central element.

Global Background

Several major economies have already enacted stringent laws against forced-labour imports.

United States - The United States has adopted one of the world's strictest systems. The Uyghur Forced Labor Prevention Act (UFLPA) creates a legal presumption that goods produced wholly or partly in China's Xinjiang region involve forced labour unless importers can prove otherwise. The U.S. Customs and Border Protection (CBP) has detained thousands of shipments involving:

• cotton,
• solar panels,
• tomatoes,
• apparel,
• electronics,
• aluminium,
• seafood.

Importers must provide extensive documentation proving clean supply chains.

European Union - The European Union has adopted regulations allowing authorities to investigate products suspected of involving forced labour. Unlike earlier approaches focused on specific regions, the EU framework applies globally. Products may be withdrawn from the EU market if forced labour is established.

Canada - Canada amended its customs laws to prohibit imports produced using forced labour. Importers are expected to conduct due diligence throughout their supply chains.

United Kingdom - The UK Modern Slavery Act requires large businesses to disclose efforts made to prevent forced labour within their operations and supply chains. Although primarily a disclosure law, it has significantly influenced corporate compliance.

Australia - Australia's Modern Slavery Act similarly requires reporting on supply chain risks. Large companies must publish annual statements describing measures taken against forced labour.

International Pressure on Supply Chains - Global companies today face scrutiny from:

• investors,
• consumers,
• civil society,
• ESG rating agencies,
• importing countries.

Many multinational corporations now require suppliers to provide:

• labour audits,
• worker welfare certifications,
• factory inspections,
• traceability records,
• third-party compliance reports.

Countries lacking adequate enforcement mechanisms increasingly face reputational risks.

India's Earlier Position - Until now, India did not have a dedicated procedure specifically examining whether imported goods were produced using forced labour. Indian laws prohibit:

• bonded labour,
• human trafficking,
• child labour,
• exploitative labour practices,

within India.

However, there was no structured mechanism allowing authorities to investigate foreign production processes before imported goods entered Indian commerce.

The new DGFT procedure fills that gap.

Why This Matters for India?

1. Responsible Global Trading Partner - India seeks to strengthen its position as a trusted global manufacturing hub. Introducing an investigation mechanism demonstrates commitment to ethical trade.

2. Supply Chain Integrity - Indian manufacturers increasingly participate in global value chains. Many exporters already comply with foreign buyers' social compliance requirements. The new procedure complements those expectations.

3. Trade Negotiations - Modern Free Trade Agreements increasingly include chapters concerning:

• labour standards,
• sustainability,
• responsible business conduct.

Having domestic procedures improves India's credibility during negotiations.

4. Protection Against Dumping Through Exploitative Labour - Products manufactured using forced labour often enjoy artificially low production costs. Such products may distort fair competition. Investigating forced-labour imports helps protect legitimate businesses operating under lawful labour standards.

Impact on Indian Importers - Importers should expect increased emphasis on supply-chain due diligence. Businesses may need to maintain documentation concerning:

• supplier identity,
• factory locations,
• labour certifications,
• audit reports,
• sourcing records,
• manufacturing processes.

Companies importing from high-risk regions may face greater scrutiny.

Industries Likely to Be Affected - International experience suggests investigations frequently involve sectors such as:

• textiles,
• garments,
• cotton,
• footwear,
• electronics,
• solar modules,
• seafood,
• mining products,
• agricultural commodities,
• metals.

These sectors often involve complex global supply chains.

Challenges in Implementation - Although the framework is significant, implementation will present several practical challenges.

Establishing Evidence - Forced labour is difficult to prove. Authorities may need to rely upon:

• independent investigations,
• labour audits,
• customs intelligence,
• international reports,
• supply-chain mapping.

Balancing Trade and Compliance - India must ensure investigations remain:

• objective,
• evidence-based,
• transparent,
• consistent with WTO obligations.

Arbitrary restrictions could invite trade disputes.

Burden on Importers - Businesses may incur additional compliance costs associated with:

• documentation,
• supplier verification,
• audits,
• traceability systems.

Small and medium enterprises may find these requirements particularly demanding.

India's Broader Trade Strategy - The notification also reflects India's broader movement towards modern trade regulation. Recent policy initiatives have increasingly focused on:

• supply chain resilience,
• quality control,
• product standards,
• strategic imports,
• trusted sourcing,
• national security considerations.

Ethical sourcing is becoming another important pillar of India's trade policy.

The Road Ahead - The notification itself does not ban any products. Instead, it creates the institutional machinery for future investigations. Whether the mechanism becomes a major enforcement tool will depend upon:

• the number of complaints received,
• DGFT's investigative capacity,
• cooperation with Customs and other agencies,
• availability of credible evidence,
• future government decisions based on DGFT recommendations.

It is also possible that detailed operational guidelines, evidentiary standards and compliance expectations will evolve through future notifications or practice.

Conclusion - The insertion of Paragraph 2.50A into the Handbook of Procedures, 2023 marks a noteworthy evolution in India's foreign trade administration. Rather than introducing an immediate import prohibition, the DGFT has established a structured process to investigate allegations that imported goods are produced using forced labour and to recommend appropriate action where evidence supports such findings.

The measure aligns India with a growing international trend in which trade policy increasingly incorporates labour rights, supply chain transparency and ethical sourcing. As major markets such as the United States, the European Union, Canada, the United Kingdom and Australia tighten scrutiny over forced-labour-linked imports, India's new framework signals an intention to strengthen oversight while preserving flexibility through case-by-case investigations.

For importers, the development underscores the importance of supply-chain due diligence and maintaining robust documentation regarding sourcing and labour practices. For policymakers, the effectiveness of the framework will depend on transparent investigations, inter-agency coordination and adherence to international trade obligations. Overall, the notification represents an important step toward integrating human rights considerations into India's trade governance and positioning the country as a responsible participant in global commerce.