India Market and Business Update: July 2025

India’s arbitration ambition: A new chapter in dispute resolution?

India has recently had a significant success in attracting foreign direct investment ("FDI"), with estimates suggesting up to USD 42.1 billion recorded in the first half of 2025, building on the $40.67 billion in FDI recorded in April-December 2024. In parallel, the Indian Government has been strengthening its arbitration law through legal reform. The relationship between both goals is clear since investments rely on modern international forums to solve their investments’ disputes. Reform of India's arbitration law is yet another indication of India's global ambitions as it seeks to position itself as the new global "arbitration hub", as the Indian Minister of State for Law and Justice put it in an institutional arbitration conference last month. Whether this ambition will be realised, is yet to be seen. 

At DWF, our Disputes team has been closely following these developments. We believe India’s evolving arbitration landscape presents both opportunities and complexities for international clients and Indian stakeholders alike.

India's economic transformation

India’s economic transformation is undeniable. The 2024 Union Budget’s emphasis on infrastructure, digitalisation, and green energy has bolstered investor confidence. FDI inflows continue to rise, particularly in sectors such as energy, infrastructure, and technology—industries in which arbitration is often the preferred dispute resolution mechanism. The increase in investors is more likely to lead to an increase of disputes. Moreover, the fact that the industries listed above are highly regulated means that there is often the need for an independent and highly technical panel to understand the complexities of the investments involved.

Institutionalisation of arbitration

Against this backdrop, India has taken steps to institutionalise arbitration. In 2019, it established the India International Arbitration Centre ("IIAC") and the Arbitration Council of India. In 2024, it prepared the draft Arbitration and Conciliation (Amendment) Bill. If enacted, the Bill will reinforce institutional arbitration and increase efficiency in arbitration proceedings. For instance, the proposed introduction of appellate arbitration tribunals—if staffed with domain experts—could reduce court backlogs and enhance the credibility of arbitral awards.

Understanding the challenges

However, India’s aspiration to become a key arbitration hub is not without friction. The Supreme Court’s decision in the NN Global case of 2023, which rendered unstamped arbitration agreements inadmissible, has raised concerns among in the international arbitration community. Whilst the ruling does not make such agreements void, it underscores the tension between procedural formalism and the commercial need for efficiency. This is an example of a challenge that India has to overcome: reconciling judicial oversight with arbitral autonomy.

Looking ahead

India’s arbitration story is still being written. The reforms underway are promising, but their success will depend on consistent implementation, judicial restraint, and the development of a robust cadre of arbitrators and institutions.

For clients navigating cross-border disputes involving Indian parties or assets, the message is clear: India is evolving. It may not yet be the default seat of arbitration, but it is increasingly a jurisdiction that attracts attention.  With a population exceeding 1.4 billion and a rapidly expanding economy, India commands significant global interest—not only as a renowned hub for technology and IT services, but also as a country actively diversifying its industrial portfolio. The government has committed over US$1.7 trillion to infrastructure development through FY2030, targeting sectors such as renewable energy, water treatment, electricity grids, data centres, and transport.

In the energy space alone, India has become the third-largest market for power generation growth globally, with 83% of 2024’s power sector investment directed toward clean energy. This strategic shift underscores India’s ambition to become a key player in the global energy transition and a magnet for foreign investment across a broader spectrum of industries. As the market continues to grow, and as the bargaining power of Indian companies increases, there will be increasing pressure for investors to agree to disputes being seated in India coupled with a desire on the part of the Indian government for the revenue generated by such disputes to be retained by the legal sector in India rather than being spent on expensive lawyers operating overseas in places like Dubai, London, Paris and Singapore.

A message to Indian clients and law firms

At DWF, we do not view India’s arbitration ambitions through a binary lens of success or failure. Instead, we recognise the complexity of building a credible, globally respected arbitration ecosystem with the ability to hear complex multi-national disputes which are seated in India but potentially governed by foreign law and requiring assistance and support from foreign lawyers. Collaboration, not competition, will be key.

As an international firm with deep India experience, we are committed to working alongside Indian counsel to deliver seamless, strategic dispute resolution services recognising the importance of cultural context, procedural integrity and the need for sustained institutional support.  Such is the nature of international arbitration.

DWF is a leading legal adviser to Indian and India-focused companies, financial institutions and high net worth individuals and families. Our India Group, consisting of 104 lawyers from 9 countries, 16 practice areas and 9 sector groups, is the largest India group of any international law firm located outside India. Dhruv Chhatralia BEM, the Head of the DWF India Group, was named to the India Business Law Journal’s International A‑List 2024. DWF was also shortlisted for “Legal Practice of the Year” at the 6th Annual UK‑India Awards in 2024. Further details can be found at https://dwfgroup.com/en/services/india-group.

If you have queries on any of the issues covered in this article, please get in touch with one of our experts.

Thank you to Sarah Deloison and Alex Falco for contributing to the production of this article.