International law of foreign investment and its implications for direct foreign investment in India

As a sovereign independent Republic, India in 1947 has embarked upon a model of Planned economic development, with government control of important public sector undertakings, keeping infra-structure development under strict federal regulation. For close to half a century this regulatory model served as the basis, with periodic "five year plans" structured around major projects of externally funded public sector undertakings, for achieving the country's rapid economic development. Sensitive to centuries of colonial domination, this approach merely reflected a cautious attitude towards foreign controlled externally based investment. Clearly, this inward-looking, planned economy, model based on import-substitution, may have influenced foreign multinational enterprises from involving in many a labour-intensive major industries in India. Consequently India has embarked upon a new approach to attract Direct Foreign Investment.; Since 1991, India has undertaken significant reforms to liberalize both trade and investment. Economic liberalization opened many sectors hitherto under government control to a greater private sector involvement. This deregulation of many sectors, coupled with reduction in tariffs has begun to encourage the entry of foreign companies. This thesis proposes to explore the many ways in which India's domestic legal system has been grappling with complex issues related to direct foreign investment evolving in response to these tremendous changes. Among the issues canvassed in this thesis is the function of law in general and International Law in particular for bringing about this economic changes. Its emphasis on "structural changes" has sought to highlight the need for legal reforms. Issues of non-discrimination, transparency and globalization are identified as relevant legal concepts and are essential components of the process of structural changes taking place in India.