India has been losing as much as 1.4 percent of its national output because of the discriminatory law, according to calculations by University of Massachusetts Amherst economics professor Lee Badgett, who has studied the issue for the World Bank.
India’s private sector is set to enter a new era of inclusiveness, after a landmark Supreme Court ruling decriminalized homosexuality in a move that’s expected to provide a significant boost to the South Asian nation’s $2.6 trillion economy. Many multinational businesses in India and elsewhere already recognize the links between inclusion of gay employees and better business outcomes and have taken steps to end discrimination in staff benefits in order to maintain a competitive workforce.
The court’s decision to overthrow the country’s notorious anti-gay law is expected to encourage others to do the same.
“It will have a massive economic impact,” says Keshav Suri, an Indian hotelier who joined other activists and social groups challenging a 158-year-old colonial law that criminalized same-sex relationships in the world’s second-most populous country.
Suri, whose family owns the luxury Lalit hotel chain that recently expanded to London, said last week’s ruling allows Indian and multinational companies to openly court India’s lesbian, gay, bisexual, transgender and queer consumers, as well as market India internationally as a destination that’s now more gay friendly. “Why are we hampering the tourism sector in this country?” he said from his 465-room New Delhi hotel.
Indian businesses — and multinationals operating here — have an opportunity to profit from the ruling, which allows businesses and government to tap into the so-called “Pink Economy”. The city of Mumbai will also benefit as it competes with other Asian financial hubs for talent, particularly following a July court ruling in Hong Kong that grants visas to spouses of gay expatriate workers, putting pressure on other centers to introduce inclusive policies.
India has been losing as much as 1.4 percent of its national output because of the discriminatory law, according to calculations by University of Massachusetts Amherst economics professor Lee Badgett, who has studied the issue for the World Bank. That means discriminating against the LGBTQ community could cost India around $26 billion a year.
“On a global level, India is creating a more welcoming environment for businesses, including the big multinationals that worry about the effect of discrimination against LGBT people on their workforce,” Badgett, who is an expert on the economic costs of homophobia, said in an email. “This strongly positive ruling could lead to more open appeals to LGBT consumers in India. Companies won’t have to worry that they’ll be criticized for supporting illegal behavior.”
Until the ruling last week, gay sex in India was outlawed by Section 377 of the Indian Penal Code, which was first enacted in 1860.
It classed homosexuality as an “unnatural offense” that goes “against the order of nature,” and mandated a prison sentence. Although prosecutions were rare, activists said it left people open to blackmail, extortion and violence.
Chief Justice of India Dipak Misra said in court on Sept. 6 that the law violated the right to equality enshrined in the Indian constitution and was being used as a “weapon of discrimination.” After the ruling, numerous companies — including Alphabet Inc’s Google and International Business Machines Corp.’s India unit — came out with statements and tweets, putting their logos or services in rainbow pride colors.
Some corporations — including IBM India, Indian conglomerate Godrej Group, Tata Group and the Royal Bank of Scotland — have openly supported inclusive workplace policies in India, even as gay and transgender employees faced discrimination elsewhere in the country.
“This goes a long way in ensuring individuals are comfortable in their own skin and for corporates to formally ensure more inclusive workspace measures that benefit the community,” said Anuranjita Kumar, managing director of human resources, international hubs, for RBS, in a statement.
Research has shown that discriminatory laws and policies dent a country’s economic output. An Indian case study Badgett completed for the the World Bank found discrimination results in constraints on the labor supply, lower productivity, lost output and high rates of poverty — as well as depression and suicide — among the LGBTQ community.
At the same time, a 2018 report sponsored by Accenture, the Brunswick Group and Thomson Reuters, among others, found inclusive policies were linked to greater GDP per capita, competitiveness, entrepreneurship, urban development, talent retention and a better national reputation that could bring in additional direct investment.
The Lalit’s Suri, who says his hotel has gained additional business by being gay- and trans-friendly, predicts the ruling will improve the reputation of India’s financial capital Mumbai. “This will make it a huge financial hub,” he said.
Suri, who has long hired gay and transgender employees and convinced his insurer to offer benefits to all his employees, says companies now have real responsibilities toward the LGBTQ community. That means hiring, providing workplace support and — importantly — offering the same benefits that currently flow to heterosexual couples, Suri says.
But it was, of course, also time to mark a hard-fought victory. Suri celebrated by kissing his husband in front of the country’s highest court and popping a bottle of champagne as he hoisted a rainbow flag at their hotel in New Delhi.
“I felt proud to be Indian,” he said.