Rules amended for entry of foreign legal firms

Mumbai | New Delhi: The Bar Council of India (BCI) has notified amended rules allowing foreign lawyers and law firms to practice international law in India, on a reciprocal basis, as part of a drive to make India a hub of international arbitrations.

The decision by India’s legal practices regulator will allow foreign law firms to establish their offices in India, provided their home countries extend the same opportunity to Indian lawyers.

Foreign lawyers and law firms can advise clients on transactional and corporate work such as joint ventures, mergers and acquisitions, intellectual property matters, drafting of contracts and other related topics.

However, they will not be permitted to appear before any courts, tribunals or other statutory or regulatory authorities.

They will also not be allowed to do any work on conveyancing of property, title investigation or other works of a similar nature.

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The BCI on Tuesday enforced the amended Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022, which were originally notified on March 10, 2023.The council said making India a hub of international arbitrations would create new opportunities for Indian advocates and law firms.The BCI’s decision “is consistent with the growing cross-border activity involving Indian entities while preserving the domain of Indian lawyers,” said Anand Desai, managing partner of law firm DSK Legal. “By allowing foreign lawyers to advise on international matters without practising Indian law, the BCI strikes a balanced approach, protecting legal sovereignty while aligning with global norms,” he said.

Ajay Khatlawala, managing partner of law firm Little & Co, said the development is expected to increase competition in areas like high-end transactions, cross-border M&A, and international arbitration, where foreign firms excel.

“Indian firms may need to raise service quality, invest in training, adopt global best practices, and enhance client service,” he said. “At the same time, it opens doors for collaboration through partnerships and referrals… This shift may lead to a more structured, professional, and innovative legal market.”

It is difficult to ascertain the size of the legal market due to its fragmented nature.

The Nifty 500 companies spent ₹52,568 crore, or about $6.26 billion, in legal expenses for the year ended March 2024, up 17.03% from ₹44,920 crore in the previous year, data compiled by ETIG show.

Lalit Bhasin, veteran lawyer and president of Society of Indian Law Firms, however, said the Supreme Court had in BCI vs AK Balaji case held that foreign lawyers cannot practice law in India directly or indirectly. Hence, it would have been better to amend the Advocates Act to allow non-Indians to practice law in India subject to BCI regulations.

“We welcome foreign lawyers, but that should be in accordance with law to avoid embarrassment to foreign lawyers, the BCI and our government,” Bhasin said.

In its notification on allowing foreign law firms, the BCI said international trade and commerce are advancing at a rapid pace, and the demand for an open, responsive, and receptive legal professional mechanism in India from clients and businesses operating in international and cross-border markets is growing significantly.

“The expansion of international legal work, the globalisation of legal practices, and the increasing internationalisation of law are becoming highly relevant to the growth and evolution of the legal profession and practices in India,” the council said.

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