The Liberalisation of India's Legal Sector: A Cautious Step Towards a Global Hub for Arbitration
UPSC Relevance
Prelims: Indian Polity and Governance (Bar Council of India - BCI); Indian Economy (Liberalisation, Foreign Direct Investment (FDI) in services); International Relations (International Arbitration).
Mains:
General Studies Paper 2 (Polity & Governance): Government policies and interventions for development in various sectors; Dispute redressal mechanisms and institutions (Alternative Dispute Resolution - ADR).
General Studies Paper 3 (Economy): Effects of liberalization on the economy; Indian Economy and issues relating to growth, development.
Key Highlights from the News
India is emerging as a major hub for international commercial disputes.
As part of this, the Bar Council of India (BCI), moving away from a decades-old protectionist stance, has allowed foreign law firms to operate in India through new rules.
According to BCI's new rules of 2025:
Permissible activities: Foreign firms can advise on the laws of their own country and international law. They can appear in international arbitrations seated in India.
Non-permissible activities: They cannot practice Indian law or appear in Indian courts.
The fundamental principle of this policy is reciprocity. That is, for a foreign country to receive this facility in India, that country must provide the same facility to Indian law firms there.
Previously, foreign firms were not allowed because Indian law firms were weak. However, Indian firms have now grown to be globally competitive.
The author describes this regulated liberalization as "Aristotle's Golden Mean," a balanced path between two extreme positions.
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