Globalization and economic liberalization in the early 1990s had far reaching
effects. Several new legislations were passed by the parliament for encouraging
foreign investment as well as for protecting the local resources from
exploitation. It is quite obvious that a foreign company would be interested in
investing in India only if it could find favorable conditions for making profit.
But profit-making can in no way be encouraged at the cost of morality, ethics,
and social responsibility. Companies investing in India were required to follow
local regulations and do transparent and responsible business.
Numerous legislations were passed post-liberalization for ease of doing
business. The government tried to cover all the possible aspects of human
rights, environment, tax, intellectual property, business, and social interest.
Now it is mandatory for all the owners of any business to get insurance policies
for its employees before they start any business that includes handling
Further legislations were also passed to protect biodiversity by prohibiting
pick, uproot, damage, destruction or anything that is detrimental to the
biodiversity of the country and the world at large, whether for scientific
research or for any other business. Provisions were also made for easy disposal
of matters related to the environment. A special board was formed to protect
the interests of the investors in securities, promote the development, and
regulate the securities market.
Regulations were also developed for foreign trade by facilitating imports and
augmenting exports from India. Legislature took further steps for better
protection of Human Rights by forming commissions both at the central and the
Globalization and liberalization also resulted in number of foreign companies
entering India for conducting clinical trial. It was necessary to regulate these
companies thus the government came up with regulations of removal, storage and
transplantation of human organs for therapeutic purposes and for the prevention
of commercial dealings in human organs. This was the period when the
government felt the need of endorsing Alternative Dispute Resolution mechanism
in India as foreign investors are not ready to get into the pain of the Indian
Court system in case of any commercial dispute that may arise. Provisions
relating to domestic arbitration, international commercial arbitration, and
enforcement of foreign arbitral awards were formulated.
The need for facilitating external trade and payments and for promoting the
orderly development and maintenance of foreign exchange market in
India regulations were developed. Legislations were also developed to provide
legal recognition for transactions carried out by means of electronic data
interchange and other means of electronic communication, commonly referred to as
electronic commerce, which involve the use of substitutes to paper-based methods
of communication and storage of information, to aid electronic filing of
documents with the Government agencies and further to amend the Indian Penal Act
Code, the Indian Evidence Act, 1872, the Banker’s Books Evidence Act, 1891 and
the Reserve Bank of India Act, 1934. Intellectual Property Rights laws for
protecting all form of intellectual properties came into continuation.
Considering the need, India also entered into an agreement with other countries
in pursuance of the Convention on International Civil Aviation that opened for
signatures at Chicago. Further provisions are made keeping in mind the
economic development of the country.
Commission was shaped to prevent practices having adverse effect on competition.
Provisions were made to promote and sustain competition in markets, protect the
interests of the consumers and ensure freedom of trade in Indian market.
Laws were framed to prevent money-laundering and to regulate the acceptance
and utilization of foreign contribution or foreign hospitality which is
detrimental to the national interest.
Laws were passed to promote transparency and accountability in working and
to prevent negligence that results in any substantial loss of human life,
destruction of property, or degradation of environment. The term “disaster
management” was introduced, which means a continuous and integrated process of
planning, organizing, coordinating, and implementing measures necessary for the
prevention, response and mitigation of disaster.
Corporate Social Responsibility is made obligatory and every company having net
worth of rupees five hundred crore or more, or turnover of rupees one thousand
crore or more or net profit of rupees five crore or more shall comprise a CSR
committee. Bankruptcy code was conceded to provide one-stop solution for
resolving insolvencies, which previously was a long process that did not offer
economically feasible arrangements.
The code was introduced with an aim to protect the interests of small investors
and make the process of doing business less cumbersome. Finally, the
government also took steps to make the indirect tax system easier by introducing
provisions of single tax regime, which, in conformity with other countries, thus
made it easier for the investors to cope up with tax regulations.
The impacts of globalization have been a mixed one. Due to globalization, on the
one hand, businesses turned towards protection of stakeholder’s rights, by being
more accountable, ethical, and transparent. On the other hand, globalization is
leading to the exploitation of local human and natural resources. The government
of underdeveloped and developing nations encourages more and more foreign
investment to meet their financial needs.
As a result, more foreign companies enter the developing market and thus exploit
the local resources for running their business and making profit. However, the
farsightedness of the government and the introductions of new legislations to a
large extent tried to stabilize the position which otherwise would have been
repulsive in the absence of aforementioned legislations.
- Public Liability Insurance Act, 1991
- Wild Life (Protection) Amendment Act, 1991
- National Green Tribunal Act, 2010
- Securities and Exchange Board of India Act, 1992
- Foreign Trade (Development and Regulation) Act, 1992
- Protection of Human Rights Act, 1993
- Transplantation of Human Organs Act, 1994
- Arbitration and Conciliation Act, 1996
- The Foreign Exchange Management Act, 1999
- Information Technology Act, 2000
- Geographical Indications of Goods (Registration and Protection) Act,
1999, Designs Act, 2000, Protection of Plant Varieties and Farmers' Rights
Act, 2001, Trade Marks Act, 1999, Biological Diversity Act, 2002
- Foreign Aircraft (Exemption from Taxes and Duties on Fuel and
Lubricants) Act, 2002, 2015
- Competition Act, 2002
- Prevention of Money Laundering Act, 2002
- Foreign Contribution (Regulation) Act, 2010
- Right to Information Act, 2005
- Disaster Management Act, 2005
- Companies Act, 2013
- Insolvency and Bankruptcy Code, 2016
- Goods and Service Tax, 2017