Abstract
The membership of international institutions generally entails imposition of a variety of obligations on the States. India has also become a member of a number of international institutions, and, thus, accepted several international legal obligations, including those in the field of economy. India’s international economic legal obligations extend to numerous fields of international life, including trade, finance, investment, etc. These developments are inevitable considering the reach and influence of economic globalization. The international economic law obligations, and the membership of international institutions require member-States to shape their domestic laws and policies to suit the international legal structure and advance economic globalization. Since the economic liberalization in 1991, India has formulated several policies and enacted number of laws as per the international mandate. Therefore, the paper intends to study the influence of the international institutions on India’s domestic policy space. It reemphasizes that countries have lost their autonomy to shape their domestic policies. The paper analyses some of the laws and policies determined by the international obligations and highlights how they serve the interests of a particular class only. The paper also argues that that the implications of these laws and policies are detrimental to labor, ordinary masses and environment. Further, they ignore the serious concerns of the poor, marginalized sections and the environment.
Introduction
From the introduction of 1991 policy of disinvestment, to the recently adopted new Labor Codes, the influence of international institutions and international financial conditionalities on Indian laws and policies has been apparent and deep. Under international law, international institutions bind the States with numerous obligations, and international treaties generally require the parties to incorporate their provisions on national level by shaping their relevant laws and policies accordingly. The Constitution of India also requires the State to foster respect for international law and treaty obligations.[1]Thus, the influence of international legal obligations in general on the national legal and policy space is quite obvious. However, the impact of international legal obligations related to economicmatters is relatively deeper, pervasive and having far-reaching consequences on international and domestic level. International economic law is an umbrella term which extends to specific areas, such as international trade, investment, monetary, finance, environment, etc. The international legal framework in thesedomains is complemented by international organizations, such as the World Trade Organization (WTO), International Monetary Fund (IMF) and World Bank. Their mode of operation is different in the sense that the association with them comes with mandatory obligations, conditions and prescriptions. For instance, the compulsory dispute settlement mechanism backed bysanctions[2]under the WTO and the policy prescriptions of the IMF and World Bank for a borrowing State.These institutionshardly provide any flexibility to the States. They also prescribe and enforce domestic policies of member-States so as to have a “unified global economic space”[3]. Considering their influential role at the global level, they have also been said to constitute a non-territorial“nascent global state”[4].The impact of these institutional mandates in India became apparent in 1990s.
The introduction of liberalization, privatization and globalization policies by India in 1991 has changed India’s economic, social, legal and political landscapes. These reforms were brought in order to open up the Indian economy to the world and allow a greater number of domestic and foreign private players to invest here for a faster economic growth.India had to do so because it took hefty loans from the IMFin order to resolve the crisis of Balance of Payments at that time.[5]In turn, India was bound to implement the conditions imposed by the IMF. Following the new economic policy, the Union and the state-governments launched privatization, deregulation and infrastructural development projects at an increasing rate.[6]India had already been a member of the General Agreement on Tariff and Trade, 1947 (GATT) since July 1948,[7] which sought to substantially reduce tariffs and other trade barriers and promote free international trade.[8] It joined the WTO, the successor of GATT, in 1995. Subsequently, India adopted several measures in order to enter the free-trade club and transform its economy. It hasbeen observed that these reforms laid a solid foundation for a rapid economic growth.[9]However, the data and experts demonstrate that the economic growth could not translate into decrease in poverty[10] and check on inflation.
The overall economic transformation at global and domestic level reflected the shift from liberalism to neo-liberalization.Backed by the elite class, neo-liberalization soon clutched the developed as well as the developing countries.[11] Some of its characteristic features are rapid privatization of public-sector enterprises, minimum state-intervention, deregulation, imbalance between labor and capital, and disregardforlabor concerns and trade unionism. International trade and financial institutions have embraced these policies and started promoting unabated trade and commercial activities globally. It of course necessitated domestic policy change.
The discussion below tries to outline the significant legal and policy changes brought in by India in order to comply with the international economic law obligations and critically studies their impact. It also seeks to emphasis the concerns largely remaining unaddressed and even worsening while prioritizing the elite class. For instance, in 2024, India’s Hunger Index Rank is 105 out of 127 countries[12] and its Happiness Index rank is 116 out of 143 countries.[13]
* Associate Professor, NLU Assam.
[1]Article 51(c), Constitution of India.
[2] B S Chimni, “A Just World Under Law: A View from the South”, 22(2) American University International Law Review, 2007, 208.
[3]Ibid., 205.
[4]B S Chimni, “International Institutions Today: A Imperial Global State in the Making”, 15(1) European Journal of International Law, 2004, 1.
[5]See generally, All India Revolutionary Students Federation, The IMF Loan: An Exercise in Mortgage (1991, AIRSF), available at: http://www.unipune.ac.in/snc/cssh/humanrights/09%20STATE%20AND%20GLOBALISATION/05.pdf.
[6] Manoj Mate, “Globalization, Rights, and Judicial Review in the Supreme Court of India”, 25(3) Washington International Law Journal, 2015, 649, 661.
[7]World Trade Organization, India and the WTO, available at: https://www.wto.org/english/thewto_e/countries_e/india_e.htm#:~:text=India%20has%20been%20a%20WTO,GATT%20since%208%20July%201948.
[8] See, the General Agreement on Tariff and Trade, 1947 (GATT), available at: https://www.wto.org/english/docs_e/legal_e/gatt47_e.htm.
[9]Jean Drèze and Amartya Sen, An Uncertain Glory: India and its Contradictions 19 (Penguin, New Delhi, 2013); Mool Chand Sharma, Globalization, Democratization and Distributive Justice 13 (Universal Law Publishing, New Delhi, 2015). However, Sharma also notes that “the country’s poor have shared less in that growth than they could have.”
[10]B S Chimni, “A Just World Under Law: A View from the South”, 22(2) American University International Law Review, 2007, 211.
[11]Sazzad Hussan, 50 Years of the Original 9/11, The Assam Tribune, 11 September 2023, 8.
[12]Global Hunger Index 2024: India, available at: https://www.globalhungerindex.org/pdf/en/2024/India.pdf.
[13]World Happiness Report 2024, available at: https://happiness-report.s3.amazonaws.com/2024/WHR+24.pdf.