In the case of Bar Council of India vs. A.K. Balaji & Others, the Supreme Court of India (“SC”) had passed an interim order on July 4, 2012, directing the Reserve Bank of India (“RBI”) not to grant any fresh permissions to foreign law firms for opening of liaison offices in India. On September 14, 2015, by an interim order of the SC, the direction given to the RBI continues whereby the RBI is not to grant such fresh permissions or renew existing permission for opening of liaison office of a foreign law firm. Foreign law firms that have been granted permission to open liaison offices prior to the interim order(s) will be permitted to continue until such permission is in force, however renewal of such permission will not be granted till the policy is reviewed and/or the final disposal of the case.

The Madras HC had earlier decreed in the above mentioned case that, foreign lawyers/law firms will not be permitted to practice law in India unless they fulfill the requirements under the Advocates Act, 1961, which the SC, in effect has upheld by its interim order(s). Although the Government of India is taking the initiative towards opening up of legal sector, in consultation with the Bar Council of India and Society of Indian Law Firms, which have in-principle agreed to opening of the sector subject to reciprocity, the directions of the SC to the RBI is unlikely to be relaxed until a formal policy in this regard is put in place. The Central Government has advocated relaxation of the legal services sector for foreign players to bring more competition and professionalism in the legal services.