बेबाक · Editorial
Labour compliance is now the measure of India's competitiveness
From a 10% forced-labour tariff abroad to contested Labour Codes at home, India is being judged by how lawfully and how well it treats its workers.
The tariff signal
As temporary tariffs expired, the United States imposed a fresh 10% Section 301 duty on Indian exports after investigations into whether trade partners were doing enough to prevent imports made using forced labour, with a separate excess-capacity investigation still pending. India, earlier slated for 12.5%, secured the lower band after New Delhi amended its foreign trade policy on June 14 to prohibit imports of goods produced using forced labour. The relief is real but conditional. It signals that access to major markets will increasingly turn on credible proof that supply chains are clean and enforcement is genuine. India should resist arbitrary pressure, but it cannot dismiss labour scrutiny as merely someone else's agenda.
The core tension
The harder question lies at home. Employers facing high power costs, labour shortages and tariff uncertainty want relief, flexibility and technology support. Worker and farmer groups argue that the Union Government notified four Labour Codes and their Rules despite six general strikes in the last six years, and they fear weaker protections in practice. Both concerns deserve a fair hearing. A factory that cannot compete cannot employ; a worker who cannot claim lawful hours, wages and safety is not sharing in growth. The republic's task is not to choose between enterprise and labour, but to make compliance predictable, affordable and enforceable.
Steel-manning both sides
The case for the Codes is coherent: consolidating labour law could, in principle, make compliance simpler and enforcement more predictable. The case against is equally serious — that the Codes and their Rules were notified despite six general strikes in six years, and that speed without sufficient consent corrodes the legitimacy any labour settlement requires. Neither can be waved away. A code that makes protection and compliance clearer is worth having; a code imposed over the objection of those it governs invites the very unrest it aims to prevent. The test is not whether reform is needed, but whether it is built with the workforce rather than around it.
The evidence
The numbers show this is not abstract. The United States is India's largest pharmaceutical export market, accounting for $9.47 billion, or 30.4%, of the country's $31.12 billion pharmaceutical exports in FY26, making proposed drug tariffs one of the biggest risks facing the sector. Compliance failures carry their own price: France's DRIEETS Ile-de-France fined Infosys Rs 2 crore after finding that its work-hour recording system did not fully comply with local labour regulations, while SEBI barred Zee Entertainment's Punit Goenka and Subhash Chandra for one year and imposed a Rs 1.48 crore penalty, citing governance failures, undisclosed transactions and misuse of company assets. Yet the revamped rural jobs scheme offers a counter-note: nearly two-thirds of work generated so far has gone to women.
The verdict
The direction is right; the method is unfinished. India was correct to prohibit forced-labour imports and to seek the 10% band rather than the 12.5% — dignity and market access now point the same way. But a labour settlement notified over sustained protest, and an export economy still exposed on pharmaceuticals and textiles, cannot be called secure. The Infosys and SEBI actions are warnings, not aberrations: foreign and domestic regulators alike will keep testing whether records, governance and workplace compliance are real or nominal. Reform must be judged by whether the least-protected worker — the informal, the rural, the woman on a muster roll — is lifted, not merely counted.
The way forward
Three concrete moves would align dignity with competitiveness. First, pair the Labour Codes with a funded formalisation drive — digital, auditable work-hour and wage records for informal and export units — so compliance becomes an asset at the border, not a shock. Second, answer the Southern India Mills Association's specific ask with a transparent, time-bound hybrid of power-tariff support, capital subsidy and technology upgrades, conditioned on labour standards, so relief and reform move together. Third, diversify export destinations, including BRICS countries for generic drugs, to blunt dependence on any single tariff regime. This is the ordinary, unglamorous work of making Indian labour both free and formal.
A country that wants trusted markets abroad must first build trusted, verifiable workplaces at home.
Your Constitutional Rights
What the Constitution guarantees in this storyTraffic in human beings, begar and other forms of forced labour are prohibited.
Fundamental RightThe State shall make provision for just and humane conditions of work and for maternity relief.
Directive PrincipleThe State shall, within its capacity, secure the right to work, education and public assistance in cases of unemployment, old age, sickness and disablement.
Directive PrincipleThe State shall not deny any person equality before the law or the equal protection of the laws. Like must be treated alike; the law cannot be arbitrary.
Fundamental RightWhat this editorial rests on
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An editorial is the considered opinion of The Mudda desk, argued from the sourced reporting above and written under our published persona, बेबाक. We name institutions and actors; we do not endorse or attack any political party. "The Mudda's Ask" is a citizen's good-faith policy proposal, grounded in the Constitution — not the platform of any party. Translations are faithful — no fact is added in any language. If we are wrong, we will say so. How we work →