Recently, on January 3, 2017, the Government of India amended the Special Economic Zone Rules, which could make Legal and Accountancy services from foreign entities possible in the Special Economic Zones. The move is been seen as a baby step towards opening India’s legal accounting sectors to foreign players.

The amendment to Special Economic Zones Rules, 2006 (hereinafter referred to as the “Rules”), which has been published in the Official Gazette yesterday, innocuously reads: “In the Special Economic Zones Rules, 2006, in Rule 76, for the words “professional services (excluding legal services and accounting) rental/leasing services without operators”, the words “professional services, rental/leasing services without operators” shall be substituted.”

Rule 76 of the Rules, provides for the scope and definition of ‘services’, and before the amendment it included the following –

“Trading, warehousing, research and development services, computer software services, including information enabled services such as back-office operations, call centers, content development or animation, data processing, engineering and design, graphic information system services, human resources services, insurance claim processing, legal data bases, medical transcription, payroll, remote maintenance, revenue accounting, support centers and web-site services, off-shore banking services, professional services (excluding legal services and accounting) rental/leasing services without operators, other business services, courier services, audio-visual services, construction and related services, distribution services (excluding retail services), educational services, environmental services, financial services, hospital services, other human health services, tourism and travel related services, recreational, cultural and sporting services, entertainment services, transport services, services auxiliary to all modes of transport, pipelines transport.”

In the said notification, for the words “professional services (excluding legal services and accounting) rental/leasing services without operators”, the words “professional services, rental/leasing services without operators” shall be substituted. That means, according to the earlier Rules, legal and accountancy services are excluded from ‘services’ which can be outsourced from overseas entities in the Special Economic Zones. The Present amendment, apparently undoes that exclusion.