EXTRATERRITORIAL DUE DILIGENCE: THE IMPACT OF THE EU CORPORATE SUSTAINABILITY DIRECTIVE ON INDIAN LABOUR COMPLIANCE

The European Union (EU) Corporate Sustainability Due Diligence Directive (CSDDD) has transformed transnational corporate governance and domestic labour compliance. This paper discusses in detail the legal, economic and operational conflicts resulting from the extraterritorial application of the CSDDD to the Indian manufacturing and textile industries. The European parent companies have, in effect, codified international standards of human rights and environmental due diligence throughout their global chains of activities. This has created friction with the Indian suppliers whose primary regulations and standards include the Occupational Safety, Health and Working Conditions Code, 2020, and the Contract Labour (Regulation and Abolition) Act, 1970. Thus, these regulations and standards are thus subject to European compliance enforcement through private contracts, with all the implications of civil liability under the CSDDD and the “audit fatigue” amongst the Indian suppliers and the broader geo-political decisions for the Global South covered by this paper, that is, regulatory domination.