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Photo: iStockphoto
Photo: iStockphoto

Law ministry holds consultations over legal sector liberalization

Bar Council of India chairman Manan Kumar Mishra says law ministry gave the task of framing regulations on entry of foreign lawyers to the council

New Delhi: The law ministry is conducting a fresh round of consultations after a committee of secretaries last year approved opening up the legal services sector to foreign lawyers, allowing them to practise in the country in the field of international arbitration on a reciprocal basis.

The committee of secretaries had also cleared a proposal to allow law firms to have more than 20 partners and lift the bar on legal advertising as part of initial efforts to improve the competitiveness of the Indian services sector and boost services exports.

A commerce ministry official speaking on condition of anonymity said the ministry had completed consultations and had moved a cabinet note last year.

“The cabinet secretariat rightly pointed out that now it needs to be piloted by the ministry of law, which is the nodal ministry. While the law ministry is on board, since it moved from one department to the other, they are conducting a fresh round of consultations which is going on. I hope the Bar Council comes on board soon," the official said.

Mint first reported on 6 April 2015 that the government was contemplating liberalizing legal services, including arbitration, on a reciprocal basis with other countries.

Liberalizing the services sector is part of the government’s efforts to improve competitiveness and boost services exports by making the necessary executive and legislative changes to domestic regulations in areas such as law, education, healthcare and logistics.

The absence of clear-cut domestic regulations is thought to be one reason India has failed to exploit the booming global services market, including with those countries with which it has trade-in-services agreements such as South Korea, Japan and Malaysia.

“We are going to move one by one. We hope to liberalize other service sectors such as education and accountancy this year," said the official cited earlier.

Manan Kumar Mishra, chairman of the Bar Council of India, said the law ministry has entrusted the task of framing regulations with regard to entry of foreign law firms and foreign lawyers in the country to the council. “The main issue is of reciprocity. It (the regulations) will be finalized within a period of two weeks," he added.

Rupa Chanda, an economics professor at the Indian Institute of Management, Bangalore, said the problem is that the Bar Council of India does not want to give or gain access.

“In such a situation, how do you effectively negotiate services agreements with other countries? It is not like our lawyers are not being hired by other countries. If we allow foreign law firms in India, we will generate knowledge and develop expertise in the area," she added.

While services contribute 57% of India’s nearly $2 trillion gross domestic product, net services exports were a meagre $75.7 billion in 2014-15, in which software exports alone accounted for $71.2 billion. India has a share of 4.4% of global services exports, while China has 6.4%.

Keeping in mind the huge potential in services exports, the commerce ministry is organizing the second global exhibition of services during 21-23 April to showcase India’s services offerings. More than 40 countries are expected to participate in the fair, which will be inaugurated by President Pranab Mukherjee.

There are 17 focus areas in this year’s exhibition, including banking and financial services, education, environmental services, green building/architectural services, healthcare, information technology and telecom, logistics, media and entertainment, professional and legal services, and retail.

Speaking at last year’s exhibition, Prime Minister Narendra Modi had said the government was working towards liberalizing domestic services sectors such as finance and legal services.

Shreeja Sen contributed to this story.

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