India's new Chief Justice has overcome cultural hurdles to take his post at a momentous historical period for the country's courts. Dominic Carman talks to India's top judge about market liberalisation, his favourite UK judges and judicial reform

The first thing you notice about Konakuppakatil Balakrishnan, the Chief Justice of India, is his size: barely 5ft tall. But his diminutive stature is compensated for by a towering intellect.

The 37th Chief Justice since India achieved independence in 1947 has certainly needed that to achieve his present position. Born into a poor, low caste family of Dalits – formerly known as the untouchables – his industrious parents could never have imagined that their son would become the first lower caste Chief Justice in India's history – a feat he achieved at the beginning of this year. They were Pulayar, a scheduled Dalit caste among the lowest of all castes in the ancient hereditary system. There are approximately 250 million Dalits in India and, despite being outlawed 60 years ago, the Indian caste system remains a stubborn anachronism in a globalised world. Balakrishnan is therefore an important symbol of change.

His father, a judicial clerk in the state of Kerala, was the first in the family to graduate from school – despite serious obstacles. And Balakrishnan had similar educational challenges, not least a six-mile round-trip walking to and from school each day. He feels that his appointment is "important for India" as modern and traditional forces struggle to reconcile the country's fast-growing economy and large, skilled workforce with widespread poverty and social conservatism.

One aspect of that struggle has recently been played out in the Indian courts, where judges have been passing judgment on some of the country's ruling elite, restoring faith in the justice system. Last year, one cabinet minister was sentenced to life imprisonment for murder while another MP was convicted of manslaughter. A recent study suggests nearly a quarter of the country's MPs face criminal charges including murder, rape and extortion.

Against this background, India's judiciary has become increasingly robust in asserting its independence. Balakrishnan says these high-level prosecutions represent "a culmination of the concerted efforts to bring such cases to court. It is beneficial for the country because it has increased public confidence in the administration of justice in India".

Balakrishnan points to a landmark ruling last December, where the Supreme Court made it easier to prosecute Indian politicians accused of corruption. Previously they had required prior consent from Parliament.

The Chief Justice recognises the huge potential for international law firms to invest in practices in India and welcomes their interest. Last month, a UK Government team, headed by Department for Constitutional Affairs minister Baroness Ashton, began touring the country in a bid to speed up liberalisation of the legal market. Ashton said: "What we are seeking is better access to global markets for our lawyers to enable them to provide services to international business and investors in any country where there is a demand for them."

Many will remember events from a decade ago when White & Case, Chadbourne & Parke and Ashurst had to give up their liaison offices following an action by the Mumbai-based Indian Lawyers Collective. The Supreme Court upheld a High Court ruling that international law firms were forbidden from operating in India after hearing representations concerning the Advocates Act, which precludes foreign firms from practising Indian law.

Much of that local hostility – based on fear of competition – still exists. India's legal regulator, the Bar Council of India (BCI), has continually declared its opposition to foreign law firms entering the Indian legal market despite repeated efforts by City firms to engage their Indian counterparts.

Hopes that the market would soon be liberalised were dashed once again in March when BCI chairman Jaganath Patnaik repeated the body's fierce opposition to the entry of foreign lawyers. His announcement followed an earlier indication by the All India Bar Association (AIBA), during a visit to the UK, that it might reverse its resistance to liberalisation. Patnaik said that the BCI was the governing regulatory body of Indian lawyers, adding that the AIBA had no authority to make statements affecting the Indian legal market nor enter into agreements on behalf of the profession.

But things are changing in some quarters. Last July, the newly-merged Fox Mandal Little (FML), India's largest law firm, which is close to Slaughter and May, petitioned the Indian Government to open up the country's legal market to foreign law firms. The firm even proposed a series of steps that could accelerate the process, suggesting that the authorities examine the UK and Singapore approaches to regulating international law firms as potential models for India.

Meanwhile, Linklaters has created an alliance with Indian firm Talwar Thakore & Associates, which was set up at the beginning of this year. And Clifford Chance's global managing partner, David Childs, confidently predicts that his firm will have 400-plus lawyers in India within a decade. Given that it was only in the early part of the 1990s that global brands such as Coca-Cola were banned from sale in India – the import of foreign goods accelerated after 1995 when India joined the World Trade Organisation – the potential for such change within the space of a decade is certainly feasible.

So is Childs right? Balakrishnan thinks that he might be. He says: "The Bar Council is raising objections to English firms coming to India. Their fear is that if English lawyers start practising in the local courts, they will encroach on their professional territory so that they lose out. I disagree with them. In my view, English law firms coming to India can only increase collaboration between Britain and India – that can only be for the better.

"As I understand it, English firms are not going to litigate in Indian courts. Their focus will be on commercial law – giving advice to their international clients in India. Not only does that make sense, but foreign firms would also benefit those among the local profession practising commercial law – it will give them more opportunities."

Unlike some of the BCI lawyers, Balakrishnan is anything but isolationist or protectionist in his outlook. A natural Anglophile, his three children all studied law at UK universities.

In discussing his high regard for the English legal system, he selects a triumvirate of distinguished judges past whom he most admires: Denning, Diplock and Donaldson.

"Although we continue to follow English courts closely, their judgments and those of other English judges may not always be relevant to Indian circumstances," says the Chief Justice, "but the analytical reasoning, as I tell my fellow judges in India, is often excellent. I advise them when going for training: always read what the English judges have to say. It helps in the approach to writing a judgment."

For many reasons, India's judges need as much help as they can get to turn the courts into the modern institutions that the country needs. According to Amnesty International, India's justice system "remains extremely slow, under-resourced and difficult to access for people from socially and economically marginalised sections of society, including lower castes and women".

The Chief Justice acknowledges the need for reform; there is no escaping the significant difficulties faced by India's court system, which has an estimated backlog of about two million cases.

"We have a real problem here," admits Balakrishnan, explaining that in the last 10 years several new categories of cases have been tried in the courts without any increased judicial capacity. He highlights section 138 of the Indian Negotiable Instruments statute, which made it a criminal offence to draw a cheque without adequate funds in a bank account. That statute alone has produced tens of thousands of extra cases each year.

He accepts that courtroom and procedural inertia can be a severe problem for foreign companies operating in India. This has been particularly acute in intellectual property (IP) disputes. "In some Indian courts there is delay, but in the Supreme Court we do give priority to such matters," Balakrishnan says. The courts in Delhi and Mumbai perform well, he believes, but he accepts there are "some problems elsewhere".

IP infringement is commonplace and enforcement tops the list of IP priorities for companies doing business in India. Balakrishnan highlights legislation protecting IP rights, including new patent legislation which incorporates features of international practice.

In the two years before he reaches 65 – the mandatory retirement age for Indian judges – Balakrishnan sees removing delay as his biggest priority.

"With so many cases pending, how can that backlog be wiped out?" he asks. "In each state, I have requested that ministers provide more money for establishing new courts."

There is, he suggests, an increased willingness by politicians to commit funds for this purpose: "If we can get over the delay, then the Indian court system will be one of the finest available. To some extent we have already succeeded in commercial cases."

In the next 10 years, he anticipates more courts and many more judges. There are currently 650 High Court judges, approximately 30 of whom are women.

"We need to be more efficient and more careful in choosing judges," he argues, "since it is very difficult, short of impeachment, to remove them. We need to take extreme care in future appointments. Sometimes, mistakes have been made in the recent past."

Two days before interviewing him, I had been fortunate to watch Balakrishnan in action among distinguished judges present at a small private dinner held in Gray's Inn. Perched between the Inn Treasurer, Lord Justice Jacobs, and the gregarious Lord Justice Laws, the Chief Justice sat opposite the forensically challenging Mr Justice Lightman and former Law Lor, Baron Stey, chairman of the human rights organisation JUSTICE.

In company, Balakrishnan is a shy man, naturally self-deprecating and unfailingly courteous. As the English judges alternated between mutual badinage and more serious banter, he listened in rapt attention.