MUMBAI: Government is likely to maintain a status quo and avoid giving clarity around whether foreign law firms can operate from India or not.
This comes about two months after the ministry of commerce and industry on January 3 amended a rule allowing foreign law firms to set up offices and advise clients from Indian SEZs.
Before January 3, India did not permit multinational law firms to operate in the country. Indian law firms were also not allowed to operate from any of the SEZs. ET was first to report in January that new rule was amended which was set to benefit financial centres, but initially Gujarat International Finance Tec-City (GIFT).
The January amendment was made by commerce ministry while whether to allow a foreign law firm in India is a purview of ministry of law & justice, say industry experts.
Representatives of Society of Indian Law Firms (SILF), a body comprising the country's top-100 law firms and the apex representative organisation for corporate commercial and litigation law, had recently met the senior government officials in ministry of law and justice.
According to a person who was present in the meeting, government has given an assurance that foreign law firms won’t be allowed in India.
Citing the ET’s January story, Lalit Bhasin, president, SILF, had written to all its members and said that the government’s decision was a “sudden and significant “development. SILF has mailed a questionnaire comprising five questions to its members seeking their opinion on whether such a notification could be issued by the department of commerce in the first place. It wanted to know whether the Bar Council of India had given its approval for this and who would monitor the foreign law firms. They also wanted to know if the foreign law firms could practice throughout India from the SEZ.
The issue could cause a face-off between two government ministries and in the meantime foreign law firms may choose to stay away from India till more clarity is provided, say industry trackers.
Source: economictimes.indiatimes.com