India’s Legal Market Reforms Leave Gaps, Blocking Foreign Participation

India’s long-awaited move to liberalise its legal market by allowing foreign law firms and lawyers limited access has encountered criticism and operational uncertainty, with experts pointing to the lack of clarity in the Bar Council of India (BCI)’s rules. 

The updated framework, introduced in March 2023, was meant to herald a new era of cross-border legal cooperation. However, more than a year later, lawyers and industry observers say ambiguity in the rules is delaying market entry and dampening enthusiasm among global law firms.

BCI Rules: What They Allow and Restrict?

Under the BCI’s amended regulations, foreign law firms and lawyers are permitted to practice non-litigious legal work in India on a reciprocal basis. This includes advising on international legal issues, arbitration, joint ventures, and mergers and acquisitions involving foreign law or international law components.

However, foreign lawyers cannot appear before Indian courts, draft legal pleadings, or engage in conveyancing work. While the regulations offer a pathway for foreign entities to establish a presence in India through registration, the actual process is fraught with legal grey zones.

Critics argue that the BCI has yet to issue clear procedural guidelines regarding registration timelines, regulatory oversight, and coordination with Indian law firms.

Foreign Firms Express Caution

Several prominent UK and US-based law firms—previously optimistic about entering India’s lucrative legal market—have reportedly adopted a wait-and-watch approach. Despite India being one of the world’s fastest-growing economies, law firms are wary of investing resources into a regulatory regime that remains vague.

Industry analysts have also flagged the absence of clear enforcement mechanisms, as well as inadequate clarity on permissible work areas for foreign entities.

Concerns from the Indian Legal Fraternity

Multiple Indian lawyers and bar associations have voiced opposition to the BCI’s liberalisation push, particularly around the lack of protective safeguards for domestic legal professionals.

They argue that the influx of foreign law firms—especially those with deep pockets and strong global networks—could erode the competitiveness of small and mid-sized Indian law firms. Critics also fear brain drain, where top Indian legal talent may be lured away by international firms offering higher pay and prestige.

The All India Lawyers' Forum and Society of Indian Law Firms (SILF) have both expressed that the current rules fail to ensure equitable growth and preserve the Indian legal ecosystem.

Statutory and Constitutional Concerns

From a constitutional standpoint, legal experts argue that the BCI may have exceeded its delegated authority by unilaterally drafting rules that could significantly alter the practice of law in India, traditionally a domain protected under Section 29 of the Advocates Act, 1961.

Moreover, there is growing concern that any conflict or misinterpretation could invite legal challenges in Indian courts, leading to prolonged litigation and further uncertainty for foreign entrants.

Comparative Global Models

India’s cautious approach stands in contrast to other Asian jurisdictions. For example, Singapore and Hong Kong have well-established regulatory frameworks allowing foreign law firms to operate in a limited capacity while ensuring strong domestic oversight.

In these markets, clear licensing structures, collaboration models, and joint ventures have fostered balanced liberalisation. India’s challenge lies in evolving a model that respects its sovereign legal traditions while adapting to the realities of global legal practice.

Expert Commentary

Sunil Ambalavelil, Chairman of Kaden Boriss and a distinguished Indian international lawyer, offered a global legal perspective on the issue:

“In the context of globalisation, the current BCI framework needs greater precision, transparency, and institutional backing to attract serious participation from foreign law firms. Without legal certainty, no responsible firm will venture into a market as complex as India’s.”

Ambalavelil, who has advised multinational companies and regulatory bodies in the Middle East and Asia, emphasised the need for reciprocity and capacity building for Indian lawyers to benefit from liberalisation rather than be sidelined by it.

What Lies Ahead?

In response to criticism, the BCI has indicated it may consider revising the rules and issuing detailed implementation guidelines. However, no timeline has been shared.

Until then, foreign firms remain hesitant, and Indian lawyers continue to debate the long-term implications of market liberalisation. In the absence of clearer policies, India risks missing out on international legal collaboration, talent exchange, and the growth of cross-border practices.

For now, the doors may be open, but many are still waiting on the threshold.