New law could be watered down despite series of raids to rescue trafficked children from garment workshops

A radical new law to ban child trafficking in India may be dropped by the country's parliament.

The Observer has learned that attempts have been made to water down the proposed move despite evidence showing the trafficking of hundreds of thousands of children in the country.

Activists say the children are used to manufacture goods which end up on western high streets and have urged consumers to demand changes in the law. Last week police in Delhi carried out raids to rescue 21 trafficked children from garment workshops in the Gonda Chowk colony.

Some of the children were found hidden in sacks. The youngest was seven. The children told their rescuers they had been working up to 16 hours a day for 20 rupees (24p) a week. The raids were the result of an investigation by the anti-child labour group Bachpan Bachao Andolan. A joint investigation between the Observer and BBA found goods being made for western brands in other backstreet workshops.

A BBA spokesman said the children were found to be employed in embroidery work in a condition of forced labour and slavery in 11 workshops tucked away among the narrow lanes of the colony. Police arrested seven suspected employers.

A total of 38 children were also rescued in other raids in Punjab and north-west Delhi.

The Indian cabinet last year backed a change in the law which would make the employment of under-14s punishable by three years in jail. The law currently bans the employment of under-14s only in hazardous occupations.

The decision to introduce the new Child and Adolescent Labour (Prohibition) Act was taken last August shortly after the Observer and the BBA exposed the scale of the problem by staging the first successful raid on a train carrying trafficked child labourers to Delhi. More than 40 children were rescued and 20 traffickers arrested.

The government also proposed to introduce the criminal law amendment bill to include a ban on child trafficking and trafficking for forced labour. The law change would provide for a sentence of between seven years and life imprisonment for those convicted.

But the Observer understands that there have been serious attempts to water down the legislation. Talks were continuing last week, with signs that a compromise might be reached, but any suggestion that the laws might be weakened has alarmed the anti-trafficking activists.

Bhuwan Rhibu, from the BBA, said: "It is very important for consumers in India and the west to speak up. People need to wise up and face the fact that many of the products they buy are made by child labour, by children abducted from their homes and whose lives have been violated."It is important now for consumers to take action and demand change, and for the authorities to then enforce the law."

According to Indian government figures, there are currently about five million children working in the country (down from nine million in 2005). But activists say that is a gross underestimate and that the true figure is closer to 50 million.

Many of those children are trafficked by criminal gangs. At least 100,000 children go missing from their homes in India every year – 274 each day – and only 10% are registered as officially missing.

The Indian government's own National Child Labour Project is reported to have rescued and rehabilitated 354,877 child labourers but mounted only 25,006 prosecutions over the last three years.

Other government records show that between 2008 and 2012 a total of 452,679 child labour and trafficking cases were reported. But the records also show that out of those 25,006 prosecutions, only 3,394 employers or traffickers were convicted.

At least the activists can take heart that they have some supporters in high places. Last month Minna Kabir, the wife of India's chief justice, wrote an open letter to the Hindustan Times newspaper in which she said: "Every society is responsible for the wellbeing and care of its children up to the age of 18 years, especially if they are marginalised, helpless and powerless to do anything for themselves."