SDG 8: Decent Work and Economic Growth | SDG 12: Responsible Consumption and Production | SDG 17: Partnerships for the Goals
Ministry of Labour and Employment | Ministry of Commerce and Industry
ILO research brief, The Potential of Import Bans to Address Forced Labour mentions that global profits from forced labour rose to USD 236 billion in 2024, creating significant financial incentives for this illicit practice. The brief examines how major economies like the United States, Canada, Mexico, and the EU are increasingly utilizing import bans to restrict market access for goods produced under exploitative conditions. These instruments apply across entire supply chains and can generate substantial extraterritorial effects, pressuring companies in producing countries to adopt remedial actions.
Operational Frameworks and Case Outcomes The implementation of these bans varies significantly across jurisdictions, shifting the burden of proof and administrative oversight:
Legal Standards: While the US Tariff Act allows for the detention of goods based on reasonable evidence via Withhold Release Orders, the EU and Mexico require established proof of forced labour before a ban is imposed.
Remediation in Malaysia: In the rubber glove sector, US import bans prompted companies to reimburse USD 30 million in recruitment fees and improve worker housing, eventually leading to the lifting of the bans by 2024.
Stakeholder Engagement in India: The Dindigul Agreement in Tamil Nadu demonstrated that company-level social dialogue between trade unions and buyers can facilitate the timely removal of trade restrictions.
What is a “Withhold Release Order” (WRO) in the context of trade enforcement? A Withhold Release Order is a specialized administrative action used by customs authorities, most notably in the United States, to prevent merchandise from entering the domestic market when there is information reasonably indicating it was produced using forced labour. Unlike a final “Finding,” which requires conclusive proof and leads to seizure, a WRO acts as a preliminary barrier that places the burden on the importer to demonstrate that the goods are compliant. This mechanism provides a powerful economic lever to compel immediate internal audits and remedial measures by foreign suppliers seeking to maintain market access.
Policy Relevance
The rise of forced labour import bans represents a shift toward trade-based human rights governance. For Indian exporters, these bans transform labour standards from a social preference into a critical market access requirement, necessitating robust internal compliance systems.
Strategic Impact:
Institutionalizing Social Dialogue: The success of the Dindigul Agreement suggests that fostering strong relationships between domestic manufacturers and local trade unions can de-risk exports against international trade sanctions.
Mitigating Supply Chain Risk: Indian enterprises must move beyond superficial audits toward tangible remediation, such as reimbursing recruitment fees, to align with the evolving standards of the EU Forced Labour Regulation.
Addressing Gendered Vulnerabilities: As seen in the Indian garment sector case, policies that target gender- and caste-based violence are essential for maintaining the “Fit and Proper” status required by major global buyers.
Countering Job Displacement: Policy makers must balance enforcement with support, as overly aggressive bans can lead to factory closures and job losses if production is shifted to less-scrutinized countries.
Follow the full report here: The Potential of Import Bans to Address Forced Labour