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In a surprising move, the Bar Council of India (BCI) has opened the door for foreign law firms and lawyers to practice in India, following years of opposition from domestic firms and lawyers.

The BCI, which oversees legal practice in India, issued registration rules for foreign law firms and lawyers through a notification on Wednesday. The regulations will enable foreign lawyers and law firms to practice transactional law and international arbitration within India’s borders on a basis of reciprocity.

“Bar Council of India 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 profession/domain grow in India to the benefit of lawyers in India too,” BCI said.

The new rules will facilitate the phased introduction of foreign law firms into the Indian legal industry – estimated at anywhere between $1.5 billion and $4 billion in size - providing a long-awaited opening for overseas law firms currently barred from operating in the country.

As the legal industry grapples with the implications of this decision, it remains to be seen how the entry of foreign lawyers and foreign law firms will shape the future of India’s legal landscape.

The Indian authorities had previously taken small steps in the past to liberalise the country’s legal market, but they amounted to little.

In 2017, the Indian government amended rules to allow multinational law firms to set up offices in its finance centres, mainly in GIFT City in the state of Gujarat. Then in 2018, an expert panel constituted by the ministry of corporate affairs (MCA) also recommended that audit firms be allowed to offer legal services. This was considered a “back door” to allow foreign firms into India and was opposed by many Indian law firms. And in 2019, the Society of Indian Law Firms (SILF) was the first to recommend to the government that foreign law firms be allowed into India in four phases.

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