The Indian government and the Bar Council of India (BCI) have once again resumed talks to open India’s legal market. On 24 June, the BCI circulated its draft rules for registration and regulation of foreign lawyers in India, 2016.
Among the objects and reasons for the rules, the BCI said “the demand for an open, responsive and receptive ‘legal services dispensation mechanism’ in India … is becoming severe day by day”. It also acknowledged that the growth in international legal services, globalization of legal practice and internationalization of the law was “increasingly becoming relevant to the growth of legal services and practices in India”.
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The draft further stated that it was essential to create a legal services hub in India, adding that any delay in permitting foreign law firm entry would leave India behind.
“[The BCI] is of the view that opening up of law practice in India to foreign lawyers in the field of practice of foreign law; diverse international legal issues in non-litigious matters and in international arbitration cases would go a long way in helping legal services grow in India”. Such opening up, carried out in a “well defined, regulated and controlled manner” and based on the principle of reciprocity, “would be mutually beneficial for lawyers from India and abroad”.
Under the rules, foreign lawyers would still be prohibited from practising Indian law. Individual foreign lawyers would have to pay a registration fee of US$25,000 while foreign law firms would pay US$50,000. The registration would be valid for five years and would have to be renewed six months before the expiry date. Renewal fees of US$10,000 are proposed for individual lawyers and US$20,000 for law firms. Individual lawyers and firms would also have to pay a security deposit of US$15,000 and US$40,000, respectively, which would be returned once the foreign law practice is terminated or once the registration expires.
Commenting on the draft rules, Sakate Khaitan, a senior partner at Khaitan Legal Associates in London, said that the Indian legal market “is now closer to liberalization than ever before” and he hoped the rules would be formally issued by the end of this year.
“The rules detail the eligibility criteria for foreign lawyers and the registration process … [but they] are currently unclear as to the type of entity that foreign firms can set up in India,” Khaitan told India Business Law Journal. “If the rules are finalized, then in accordance with foreign direct investment regulations, it is likely that branch offices and wholly owned subsidiaries will be permitted. The Bar Council ought to give clarity on the type of structure it would permit foreign firms to adopt in India.”
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