India’s exports of solar panels, electronics and garments may come under closer scrutiny after the United States launched a fresh trade investigation into the presence of forced labour in global supply chains, a report by the Global Trade Research Initiative (GTRI) has said.
Earlier on March 12, the United States Trade Representative (USTR) announced the probe under Section 301 of the Trade Act of 1974 covering 60 economies. These include India, China, the European Union, the United Kingdom, Japan, Canada, Australia, Mexico, Brazil, Vietnam, Bangladesh, Cambodia and Pakistan. It marks the second Section 301 investigation initiated by Washington this month.
About the probe:The inquiry will look at whether goods made using forced labour are entering international supply chains. “It will look at two situations: where forced labour is used directly in production, and where countries import inputs made with forced labour from other countries and use them to produce goods that are later exported to the United States.”
Officials will also study whether advanced economies have adequate legal frameworks and enforcement systems to prevent goods made with forced labour from being imported or sold within supply chains.
The GTRI report noted that according to Washington, such goods can still disrupt markets even if they pass through third countries before entering global trade, as lower production costs can give them an unfair price advantage over legitimate producers. “The US argues that if such goods enter international trade through third countries, they can still distort markets by lowering production costs and undercutting legitimate producers.”
China under lensChina is expected to feature prominently in the investigation because of long-standing allegations regarding labour practices involving Uyghur and other Muslim minorities in the Xinjiang Uyghur Autonomous Region.
Governments and human-rights groups have alleged that labour-transfer programmes move workers into farms and factories connected to export-oriented industries. China has rejected these claims, stating that the programmes are designed to create employment opportunities and provide vocational training.
Investigations in the past have linked labour programmes in Xinjiang to industries such as cotton farming, textiles, garment production, tomato processing and the manufacturing of polysilicon used in solar panels.
The controversy earlier prompted the United States to implement the Uyghur Forced Labor Prevention Act, under which goods linked to Xinjiang are presumed to have been produced with forced labour unless importers can demonstrate otherwise.
Because of these concerns, several Chinese products have been identified as high risk in global supply chains. These include cotton and cotton textiles, with Xinjiang accounting for around 20% of global cotton production, along with polysilicon used in solar panels. At the same time, products like tomato paste, processed foods, garments, fabrics, electronics components, cables, peppers and garlic have also drawn scrutiny.
The investigation is also expected to review labour practices in countries such as Myanmar and North Korea, where forced labour allegations linked to state authorities or armed groups have persisted for years.
How is India at risk?
While India bans forced labour under the Bonded Labour System (Abolition) Act, 1976, its export sectors could still be drawn into the investigation due to their dependence on imported inputs from China.
According to the GTRI report, several industries may be affected:
- Solar equipment exports from India to the United States often rely on imported polysilicon or solar cells that originate from Chinese supply chains previously questioned over alleged forced labour links in Xinjiang.
- Electronics manufacturers in India also depend heavily on Chinese components, cables and sub-assemblies. If these parts are traced back to regions associated with labour-transfer programmes, they could come under scrutiny during the investigation.
- In the textiles and garments sector, Indian producers frequently use yarns and fabrics sourced from China. These inputs could face tighter traceability requirements if linked to cotton originating from Xinjiang.
“Because the United States is a major market for solar equipment, electronics and garments, Indian exporters may face higher compliance costs and stricter documentation requirements as US authorities demand detailed proof of the origin of inputs used across supply chains,” the report said.
Section 301The forced labour probe follows another Section 301 investigation announced by the USTR on March 11. That inquiry is examining whether industrial policies in 16 economies have led to excess manufacturing capacity that harms US industries. India has been named in both probes.
The report said the United States appears to be relying more on trade investigations after legal rulings constrained earlier tariff strategies. It added that the move may also be aimed at discouraging countries from walking away from trade deals negotiated during the Trump administration after those agreements lost value following the US Supreme Court’s February 20 ruling.
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