Narendra Modi’s business-friendly government has started to open the door to foreign law firms operating in India, albeit only slightly. In 2023, the Bar Council of India issued guidance which allows foreign lawyers to practice international law within the country. However, this has been met with cautious optimism, as firms are wary due to historical setbacks and uncertainties around the new regulations.
According to Robert C. Bata, principal at WarwickPlace Legal, the attractiveness of establishing a presence in India is tempered by the fact that foreign law firms were previously expelled in the 1990s due to opposition from the local bar. Most firms are consequently adopting a wait-and-see approach. Many global law firms currently employ a “fly in, fly out” model, operating from nearby hubs like Singapore or establishing relationships with local firms rather than setting up full-fledged offices.
The economic lure is undeniable. India has seen more than $92 billion in M&A transactions this year, a sharp upswing that illustrates a buoyant investment environment. Rajiv Biswas, an international economist, highlights that foreign investors are eyeing India with keen interest, further evidenced by significant transactions such as Brookfield India Real Estate Trust’s investment in the country.
Despite the economic potential, firms are proceeding with caution. As Clifford Chance’s managing partner Charles Adams notes, firms are eager to enter but wary of being seen as exerting control over the local economy. Clifford Chance, for one, is content to be part of a secondary or tertiary wave of foreign firms establishing an on-the-ground presence, provided the initial entrants pave a smoother path.
Among the firms taking the lead, Baker McKenzie is preparing to open an office as soon as regulations allow. The firm currently operates a Global India Practice out of Singapore. On a broader scale, the Bar Council’s recent decision to permit foreign lawyers to work reciprocally—which extends to jurisdictions like England and Wales—has yet to result in a flurry of new entrants. The specifics of foreign legal practice under the new rules remain ambiguous and subject to India’s “multi-tiered bureaucracy,” as noted by Bata. This ambiguity, coupled with the possibility of regulatory limits to protect local firms, has contributed to the cautious stance adopted by many potential entrants.
Even so, some international firms are already working within India through various arrangements. Dentons, for example, preempted regulatory changes by forming a strategic partnership with India’s Link Legal. This allows them to function compliantly within the Indian legal framework while maintaining a global presence. Similarly, Japanese firms like TNY Legal and GVA Professional have entered the market, reflecting increasing Japanese corporate ventures in India.
Despite the new opportunities, the hurdles remain significant. Regulatory challenges persist and local resistance has not disappeared. Previous attempts by firms like White & Case, Chadbourne & Parke (now Norton Rose Fulbright), and UK-based Ashurst were thwarted by local objections, culminating in a 2010 Bombay High Court ruling against foreign firm branch offices. Currently, an ongoing court challenge exemplifies lingering resistance to opening the market to overseas lawyers.
In conclusion, while India’s evolving legal landscape presents new opportunities, foreign law firms must navigate a complex and cautious route to establish a lasting presence in the country. The coming years will reveal whether these initial “baby steps” will lead to a more robust presence for foreign firms in India. For more information, visit Bloomberg Law.