The State Department in its annual 'Trafficking in Persons Report 2016' has placed in India in Tier-II on a scale from the worst on Tier 3 to best on Tier 1. Others South Asian countries in the category were Nepal, Bhutan and Bangladesh.
India's other neighbours China, Pakistan, Maldives, Afghanistan and Sri Lanka have been placed in a so-called 'Tier 2 Watch List. If a nation sits on the Tier 2 Watch List for two years, it's automatically downgraded to Tier 3, unless the US Secretary of State decides to waive it for a maximum of two years.
"India is a source, destination, and transit country for men, women, and children subjected to forced labour and sex trafficking," it said.
The State Department appealed to the Indian government to increase prosecutions and convictions for all forms of trafficking, including forced and bonded labour, respecting due process.
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Forced labour constitutes India's largest trafficking problem; men, women, and children in debt bondage- sometimes inherited from previous generations- are forced to work in brick kilns, rice mills, agriculture, and embroidery units, it said.
"Within India, some are subjected to forced labour in sectors such as construction, steel, and textile industries; wire manufacturing for underground cables; biscuit factories; pickling; floriculture; fish farms; and ship breaking," said the State Department.