Prime Minister Narendra Modi’s government, which is keen to allow entry of foreign law firms into the country to boost ease of doing business, will start off by allowing these companies to operate in foreign law and arbitration for cross border businesses and joint ventures (JVs).
In the initial phase, these law firms will not be permitted to deal in litigation and Indian law.
An announcement to this effect could be made by the end of this year.
Senior government officials will meet stakeholders on September 29. Sources said that Modi himself is keeping a close watch on the developments.
The Bar Council of India (BCI) is ready with its first draft guideline on the matter. This has been circulated to the stakeholders for their comments.
The move is not only expected to support the needs of a growing economy but also boost competition and bring in the best practices.
“The entry of foreign law firms would push economic reforms and growth in the country and this will also send a positive message to the business community across the globe who are looking to invest in India,” said a senior government official.
Foreign law firms until now have not been allowed to operate in India.
“With India targeting a $5-trillion GDP figure in the next 5-7 years, the reforms in legal services sector has to keep pace with the requirements of stakeholders in the development and growth of India.Once the foreign law firms are allowed to operate in India, they would have an impact on all kinds of domestic law firms that are emerging, boutique, small, besides the law schools, and their students would also stand to benefit,” Manoj Kumar, legal expert and managing partner Hammurabi and Solomon said.
India has over 1.4 million advocates and the estimated total value of the legal services market was $1.25 billion about five years ago.