India legal market liberalisation hits new roadblock

India has taken one step forward and two steps back in its move to liberalise its legal market following an unexpected move by the Bar Council of India (BCI) this month.

The BCI has U-turned on a bill that would open up the legal services market to foreign firms, adding further uncertainty to the long-running row over liberalisation.

The council completed its keenly anticipated proposed rules to allow foreign lawyers to practise in India back in July. But at the end of September, it backtracked on its previous support of liberalisation of the legal market and withdrew its draft rules, according to Legally India.

It is understood that BCI rescinded its support for the proposal due to strong opposition from state bar councils and as a result of its objection to the involvement of private organisations, such as the Indian Corporate Counsels Association (ICCA), in the discussion with the Ministry of Law and Justice.

Several international firms expressed disappointment at the latest development.

“The BCI backtrack just underlines that, after some glimmers of optimism were shining through the fence, the opening up of the market is not going to happen any time soon,” said a head of India practice at an international firm.

“The opposition is just far too strong.  This is a pity since, whether or not a foreign firm felt the need to actually set up in India, it would have sent a really positive and progressive message if they had the option to do so.  The other issue in all of this is what do the GCs on the ground want?”

In the latest development, Legally India reported last Friday (21 October) that the Indian Corporate Counsels Association (ICCA) proposed eight weekly meetings between various stakeholders in the legal services liberalisation discussion, in order to prepare a status report on the points of consensus and disagreement between them. Its proposal comes after a month and in a response to the BCI’s withdrawal of its support towards liberalisation and the end of its involvement in the discussion.