India’s law firms might be the last obstacle to the government’s plans to liberalise its legal industry, after the country’s most prominent law firm association sought responses to a recent government plan to allow foreign law firms to operate within special economic zones (SEZs).

Earlier this month, the government amended a rule that would allow foreign law firms to operate from SEZs. “Some of the services of foreign lawyers that are outside the purview of Indian regulators include advice on foreign law and foreign-law related transactional advisory and International arbitration,” said Manoj Kumar, founder of law firm Hammurabi & Solomon.

“The government of India has expanded the definition of 'services' in the context of SEZs to include foreign lawyers, thereby permitting foreign lawyers to set up offices [in those],” added Kumar, who is helping draft guidelines for the liberalisation of the legal sector.

In response, the Society of Indian Law Firms, which comprises the country’s 100 largest law firms, has sent a questionnaire to its members seeking their response to this "sudden and significant development," according to media reports.

The questions included whether such a notification could be issued by the Department of Commerce in the first place; whether the Bar Council of India had given its approval and who would monitor the foreign law firms; and whether foreign law firms could practice throughout India from the SEZ. Law firms were required to give their responses by Jan. 25.

Kumar said he expected the liberalisation process to proceed rapidly, and that 2017 would be the year that world-class legal services were available to Indian entrepreneurs at their doorsteps. At the same time, liberalisation of legal services will have to be accompanied with other initiatives to increase the comfort level of consumers of legal services to not look beyond Indian shores to access first-rate legal services.

“The challenge is to gain the confidence of foreign businesses operating in India,” explained Kumar. “This will need reform in the arbitration laws as necessary to enable all stakeholders to look at India as the hub for all International mediation, conciliation and arbitration. The need to do business in India but seek legal support and resolve disputes outside India should go.”

He concluded that in the meantime, Indian lawyers should not be unduly worried. “There are enough safeguards in the Indian Advocates Act, 1961, to protect the concerns of Indian lawyers on issues of practice of Indian law and litigation by foreign lawyers in India,” Kumar said.