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Advent of New Regulations in India in the Wake of Globalization: An Overview of a Selected Few

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 hazardous substances[1].

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[2], whether for scientific research or for any other business. Provisions were also made for easy disposal of matters related to the environment[3]. A special board was formed to protect the interests of the investors in securities, promote the development, and regulate the securities market[4].

Regulations were also developed for foreign trade by facilitating imports and augmenting exports from India[5]. Legislature took further steps for better protection of Human Rights by forming commissions both at the central and the state level[6].

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[7]. 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[8].

The need for facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India[9] 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[10]. Intellectual Property Rights laws for protecting all form of intellectual properties came into continuation[11].

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[12]. 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[13]. Laws were framed to prevent money-laundering[14] and to regulate the acceptance and utilization of foreign contribution or foreign hospitality which is detrimental to the national interest[15].

Laws were passed to promote transparency and accountability in working[16] 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[17].

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[18]. 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[19]. 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.[20]

Conclusion
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.

End-Notes:
  1. Public Liability Insurance Act, 1991
  2. Wild Life (Protection) Amendment Act, 1991
  3. National Green Tribunal Act, 2010
  4. Securities and Exchange Board of India Act, 1992
  5. Foreign Trade (Development and Regulation) Act, 1992
  6. Protection of Human Rights Act, 1993
  7. Transplantation of Human Organs Act, 1994
  8. Arbitration and Conciliation Act, 1996
  9. The Foreign Exchange Management Act, 1999
  10. Information Technology Act, 2000
  11. 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
  12. Foreign Aircraft (Exemption from Taxes and Duties on Fuel and Lubricants) Act, 2002, 2015
  13. Competition Act, 2002
  14. Prevention of Money Laundering Act, 2002
  15. Foreign Contribution (Regulation) Act, 2010
  16. Right to Information Act, 2005
  17. Disaster Management Act, 2005
  18. Companies Act, 2013
  19. Insolvency and Bankruptcy Code, 2016
  20. Goods and Service Tax, 2017

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