Treaties on Trade and Investment and the Indian Legal Regime: Should We Mind the Gap?

Australian Journal of Asian Law, Vol. 11, No. 1, pp. 56-81, 2009

26 Pages Posted: 14 May 2010 Last revised: 16 Apr 2014

Date Written: March 1, 2009

Abstract

This article looks at the relationship between trade and investment treaties signed by India and the Indian federal domestic legal regime in light of existing constitutional provisions that give the right to the central executive to negotiate and sign international treaties. It focuses on trade and investment treaties, rather than all international treaties signed by India, because the former treaties impose relatively more onerous obligations that constrain the national policy space. The article challenges the present practice in India, where international treaties on trade and investment bind India without undergoing any parliamentary approval or ratification. This can occur because the Indian Constitution is silent regarding the status of such international trade and investment treaties within the domestic legal regime, especially in cases where these treaties have not been transformed into a domestic legislation. The article also discusses those situations where an Indian law could conflict with an obligation imposed by an international trade and investment treaty that has not been transformed into a domestic legislation. Further, the Indian Constitution is also silent on whether the central executive can negotiate and sign treaties on subjects given in the State List, or whether the power to sign international treaties is limited to subjects given in the Union List. The present practice, whereby the central executive signs trade and investment treaties on State subjects without consulting the States, affects the constitutional policy space of the States and undermines the federal polity. The article concludes by stressing the need to develop a new law, clearly stipulating how the executive should go about the business of signing trade and investment treaties.

Keywords: India, Indian Constitution, WTO, Bilateral Investment Agreements, International Investment Agreements, Treaty Ratification, Federalism, Parliament

Suggested Citation

Ranjan, Prabhash, Treaties on Trade and Investment and the Indian Legal Regime: Should We Mind the Gap? (March 1, 2009). Australian Journal of Asian Law, Vol. 11, No. 1, pp. 56-81, 2009, Available at SSRN: https://ssrn.com/abstract=1601789

Prabhash Ranjan (Contact Author)

South Asian University ( email )

Akbar Bhawan
Chankyapuri
Delhi, WA
India

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