If India had its dawn at its ‘Tryst with Destiny’ under Jawaharlal Nehru in 1947, 2017 marks a new pinnacle for the country as it emerges to seek its rightful place in the table of world leaders. The country currently has all the right calibration in place—a fast growing and robust economy churning a year on year GDP growth of 6.6 per cent, an unrivalled youth demographic with 65 per cent of its population at 35 or under, and a resilient business market system serving a billion-plus indoors and many more internationally.
After nearly 45 years of Independence, India’s economy moved towards being more market and service-oriented. The economic liberalisation was the single radical step, which changed the nation’s face, bringing reduction of import tariffs, deregulation of markets, reduction of taxes, and greater inflow of foreign investments. We also have a more active political machine in place, willing to take the hard decisions and unafraid to initiate radical policy changes. While this is commendable, at this juncture, we still have quite an amount of work due, to complete the task of equipping the country.
One sector where India has to catch up, and fast, is its legal system and framework. Indian courts and judicial system are still primeval. As a country, which seeks international investments and a voice, India has to be capable and vigorous enough to provide the necessary support and security. One of the best means to achieve an international standard is by the liberalisation of its legal sector.
The opening up of the Indian legal service profession for an overseas firm is already long overdue. Allowing foreign firms to start their operation would enable opening the legal sector in India to international competition. This would also benefit India. Firstly, it will give confidence to foreign direct investors who like the comfort of dealing with a law firm in India from their own country.
Secondly, at present there are few Indian firms monopolising in the country the sector of international work, and competition will have a direct effect on lowering the price for the services. Thirdly, it will cause Indian firms to be introduced to international standards, which would be good for the legal profession in India, and finally it will give an opportunity for young Indian lawyers to work with overseas international firms.
At present, overseas firms are working in India through best friendship alliance and sending a representative(s) from the overseas firm’s office to sit in the Indian firm’s offices and work from there. Allowing overseas firms to operate in India might well put an end to these surreptitious practices, which would be good for the Indian legal profession.
Befitting its position as the world’s fastest-growing large economy and commitment to ongoing market liberalisation, the government of India had stated unequivocally that it will continue to repeal thousands of antiquated laws in the country with a view to modernising its legal sector. When the legislature is done with eliminating the burden of obsolete legislation, it will then be well-placed to reform current law and further spur India forward as a world leader in terms of both economics and justice.
Currently, there is an incredible scope for arbitration and foreign law practice for international firms in India along the lines of international investments that the country has been receiving. If India can indeed go ahead with this, the legal sector would benefit in the knowledge transfer with global best practices, while opening up to international challenges posed by globalisation of business.
Liberalisation will, therefore, enable India to be better equipped and capable to handle the required level of international work in the country, which is a pre-requisite for incubating world standards for an ambitious world leader. The aging legal system would certainly find it as a jolt into the 21st century we are already in.
Founder & Senior Partner at Zaiwalla & Co. LLP, London