Why the next Atmanirbhar challenge for Indian business may be arbitration

India's push towards self-reliance is no longer limited to manufacturing, technology, energy or critical supply chains. As Indian companies expand overseas and enter increasingly complex global transactions, another less visible question is gaining importance: where should they resolve their commercial disputes?

For decades, Singapore, London and Hong Kong have been preferred arbitration destinations for Indian businesses involved in cross-border contracts. These jurisdictions have built strong reputations for independent institutions, experienced arbitrators, predictable procedures and limited court interference.

But as India's economic influence grows, a new question is emerging: should Indian companies continue to send their disputes abroad by default, or can India build an arbitration ecosystem that businesses trust just as much?


The debate is not about replacing foreign arbitration centres overnight. It is about whether India can create institutions strong enough to become a genuine first choice for domestic and international businesses.

Senior Counsel Tushad Cooper believes the issue is becoming increasingly relevant as India's commercial footprint expands. “The issue is not whether foreign arbitration centres are good. The real question is whether Indian and eventually global companies trust it just as much. India cannot become an economic powerhouse while exporting its disputes,” Cooper says.

India's global businesses, overseas disputes

Arbitration is important for companies involved in infrastructure, energy, technology, construction, manufacturing and cross-border investments. Instead of taking every contractual dispute through conventional courts, businesses can agree to have an independent tribunal decide the matter.

The location, or seat, of arbitration matters because it determines the legal framework governing the arbitration and the courts that have supervisory jurisdiction over the proceedings. For an Indian company signing a major international contract, selecting Singapore or another established arbitration centre can therefore be a strategic decision.

The attraction is understandable. International businesses generally want a neutral venue, procedural certainty and confidence that courts will not intervene unnecessarily.

But there is a bigger question for India. If Indian companies increasingly conduct business around the world, should the country also develop institutions capable of resolving a larger share of the disputes arising from that business?

The Singapore question

Singapore has established itself as one of the leading international arbitration centres. Its appeal comes from more than geography. Businesses have confidence in its arbitration institutions, legal framework, arbitrator pool and approach to judicial intervention.

That makes changing corporate behaviour difficult. For Indian companies, choosing Singapore has often been viewed as a risk-management decision. The foreign seat provides a degree of neutrality and an established dispute-resolution framework.

But relying on an overseas seat also means accepting that the arbitration will operate within another jurisdiction's legal and institutional framework. That distinction has become more visible following the recent dispute involving an Indian company in the power sector.

The dispute has renewed discussion around the relationship between finality, judicial intervention, disclosure obligations and the safeguards available in international arbitration.

The wider lesson for Indian businesses is not necessarily that Singapore is the wrong choice. It is that the choice of an arbitration seat deserves greater attention before a dispute occurs.

Finality versus scrutiny

One of arbitration's biggest advantages is finality. Companies choose arbitration partly because they do not want a dispute to move through years of litigation and multiple layers of appeals.

But there is a trade-off. A system designed to minimise judicial intervention also leaves limited scope for courts to revisit an arbitral tribunal's conclusions.

That can be an advantage when parties want certainty. It can become more complicated when one party believes that issues relating to procedure, disclosure or potential conflicts require closer examination.

For corporate boards, this creates a difficult question. How much finality is desirable when the amount at stake runs into hundreds or thousands of crores?

And what level of institutional oversight gives companies confidence that the process remains fair without turning arbitration into another form of prolonged litigation?

These are questions that Indian businesses will increasingly have to consider when negotiating international contracts.

India has already started the reform process

India is not beginning from zero. The Arbitration and Conciliation Act, 1996 has undergone significant changes, including amendments in 2015, 2019 and 2021. The government's stated objectives have included faster proceedings, greater neutrality, reduced judicial intervention and quicker enforcement of awards.

The country also has institutional arbitration centres and an expanding pool of lawyers, arbitrators and professionals working in the field. The challenge now is less about creating a legal framework on paper and more about building confidence in its day-to-day functioning.

That means efficient case administration, high-quality arbitrators, predictable procedures, transparent appointments, strong ethical standards and consistent decisions. For companies, these details matter more than slogans.

Trust is the real competition

Singapore did not become a major arbitration centre simply because companies were told to use it. Trust was built over time.

Businesses need to believe that the institution handling their dispute is independent, that proceedings will be professionally administered and that arbitrators will have the expertise required for complex commercial matters.

India will have to build the same confidence. Cooper argues that this should not be viewed as an exercise in favouring Indian businesses. “A dispute between an Indian and a Foreign company arising from an commercial transaction should have access to a world-class, independent and credible Indian arbitration institution. This is not an argument for protectionism,” he says.

The objective, he adds, should be to create institutions where neither party has to worry about the nationality or background of the arbitrator. That distinction is important.

For Indian arbitration to become globally competitive, it cannot simply be a system that Indian companies are encouraged to use. It must be one that foreign companies also want to use.

The talent question

There is another part of the challenge: Indian participation in the global arbitration ecosystem. As per available data to the relatively low number of Indian arbitrators receiving appointments in major international proceedings.

Building a stronger domestic arbitration ecosystem could also help develop a professional pipeline. It could also create opportunities for Indian lawyers, technical experts, retired judges, academics and industry specialists to participate in increasingly sophisticated commercial disputes.

Atmanirbharta beyond factories and supply chains

The idea of Atmanirbharta is often associated with reducing dependence on imported goods or strengthening domestic manufacturing. For a globally integrated economy, however, self-reliance does not necessarily mean operating entirely within national borders.

It can also mean having institutions capable of supporting Indian businesses wherever they operate. Banks, capital markets, insolvency mechanisms, commercial courts and arbitration institutions are all part of that infrastructure.

A company may have a world-class factory and a global customer base, but if a major contractual dispute requires it to depend entirely on another country's dispute-resolution ecosystem, there remains an institutional gap.

That does not mean foreign arbitration should disappear from Indian contracts. There will always be transactions where an overseas seat makes commercial sense. International parties may want neutrality, a particular legal framework or access to a specific pool of arbitrators.

The objective should instead be to ensure that India is a credible option rather than an automatic second choice.