When India opened its economy to international investment in 1991, Manmohan Singh, then the country’s finance minister, promptly allayed concerns that this may harm Local industries. In his infamous budget that year, Singh stated, “We must not stay enslaved to a dread of the East India Company as if nothing has changed in the past 300 years. The Indian industry had matured and was prepared to compete with global investment, he continued, adding that India was capable of engaging with foreign investors on its own terms.
He was accurate. Nearly all industries are now open to foreign direct investment, or FDI, which reflects this. The Indian legal services market may be the only one that has endured this long.
With the Bar Council of India officially paving the way for international attorneys and companies to set up shop here, that door has been partially opened, but not entirely. It is a guarded opening, and only business transactions or reciprocal corporate work are permitted.
According to the Bar Council of India Regulations for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, foreign lawyers are currently not permitted to appear before tribunals outside from statutory or regulatory boards. This would essentially imply that only chamber practise or work in areas like international law concerns and arbitration matters here would be permitted.
The long-awaited free trade agreement between India and the UK is the background to this liberalisation. The two nations have been talking for a long time to allow UK attorneys and law firms to establish themselves in India, whose economy is anticipated to be among the top three in the world.
The Indian market is seen as potentially lucrative by the UK legal services sector due to the country’s domestic growth, the presence of several foreign enterprises, cross-border transactions, as well as a larger proportion of the rising number of arbitration cases. According to an Indian Supreme Court decision, before the BCI guidelines were published, the best that foreign attorneys could aspire for was to transit through India briefly.
The new regulations may make it unnecessary for many local businesses with worldwide operations, partners, or business ties to travel abroad to consult with foreign lawyers in other countries in order to circumvent such limitations. Also, there is the possibility that international businesses or attorneys would start expanding their operations in India by teaming up with boutique or mid-sized law and legal advising companies, particularly in the commercial and regulatory sectors.
Additionally, it might strengthen the accepted standards and best practises for commercial arbitration and, over time, foster the growth of a reliable and competitive international arbitration centre. Given its proximity, effectiveness, and quickness, the Singapore International Arbitration Centre (SIAC) has become the preferred venue for many Indian businesses. BCI’s relaxation of the restrictions now presents both an opportunity and a challenge.
But, it might also be too soon to celebrate. For starters, the BCI and the government will have to get through potential opposition from a wider group of attorneys. The Advocates Act of 1961, which outlines the standards for legal practise, may potentially present a legal obstacle. Possibly for this reason, the council and the government have only slightly loosened the requirements to launch the free trade agreement, with the intention of relaxing them later, as has been the case in many other industries.
The opportunity to consider the nation’s system for contract enforcement, the frequency of arbitration and litigation, and the cost to the economy should also be taken advantage of when the Indian legal services market opens up. There is no doubt that Indian attorneys and law companies are qualified and equipped to handle this issue.
