Between The Market And The Firm

India, China, and a Reciprocity Test With No Method

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The draft Advocates (Amendment) Bill published by the Bar Council of India in July would give statutory footing to the framework under which foreign lawyers and foreign law firms may register in India. The permission it contemplates is narrow. No appearance before Indian courts, tribunals or statutory authorities. No claim to the rights of an enrolled advocate. Participation confined to international commercial arbitration matters and to temporary fly-in fly-out work, subject to rules the Bar Council may frame only with prior Central Government approval, and subject to reciprocity.

Reciprocity is doing a great deal of work in that sentence. It is worth measuring against its parallel in specific jurisdictions.

China is a useful test. The answer as yet is non-obvious and elusive in existing literature in either market. 

What China permits

A foreign law firm may operate in China only through a representative office established with the approval of the judicial administration department of the State Council. The restrictions on that office are severe and specific.

It may not engage in Chinese legal affairs. It may not employ Chinese-licensed lawyers to practise Chinese law. Its representatives may not appear in court. Its permitted activities are confined to advising on the law of the home jurisdiction and providing information on the Chinese legal environment, and it may commission a Chinese law firm on behalf of its clients. It may not invest in a Chinese firm, manage or control one, form a joint venture or joint office with Chinese practitioners, or second staff into a Chinese firm to provide legal services.

Qualification is closed. Only Chinese nationals may sit the unified legal profession qualification examination, and China made no commitment on non-nationals practising Chinese law at WTO accession.

There is one significant opening. Foreign lawyers may generally represent clients in CIETAC proceedings that do not involve Chinese legal affairs, and CIETAC’s rules permit proceedings in languages other than Chinese.

The convergence

Set the two regimes beside each other and the resemblance is striking.

India would permit foreign lawyers to advise on foreign law and to act in international commercial arbitration, while excluding them from courts and from Indian law practice. China permits foreign lawyers to advise on home jurisdiction law and to act in CIETAC arbitration not involving Chinese legal affairs, while excluding them from courts and from PRC law practice.

Both reserve domestic court advocacy to their own qualified profession. Both reserve domestic law practice by qualification. Both open the same narrow lane, which is international arbitration conducted on foreign or non-domestic law. India is even proposing to remove the provision that allowed foreign nationals to enrol as advocates, which moves it closer to the Chinese nationality position rather than away from it.

If reciprocity is assessed by comparing the permission India would grant against the permission the other jurisdiction grants in the same activity, China appears to satisfy it in the arbitration lane and to fail it comprehensively everywhere else.

The arbitration lane is the only lane India is opening.

The unsettled question

The difficulty is that reciprocity has no stated methodology, and the choice of methodology produces opposite answers.

Assessed holistically, across the legal services market as a whole, China looks restrictive. Representative offices cannot hire local lawyers, cannot enter joint ventures, cannot take equity in local firms, and cannot second lawyers into them. Any comparison of overall market access would weigh those prohibitions and conclude against reciprocity.

Assessed lane by lane, against the specific permission being granted, the answer reverses. India is not offering joint ventures, equity participation or the employment of Indian advocates either. It is offering arbitration work and fly-in fly-out advice on foreign law, and China offers something closely comparable.

Nothing published indicates which approach the Central Government would take, who conducts the assessment, whether it is jurisdiction-wide or practice-specific, or whether a determination once made is reviewable. These are all foundational questions for any firm deciding whether to build an India position.

The Takeaway for Firms on Both Sides

For a PRC firm, the arbitration lane is the whole of its realistic interest in India. It cannot practise Indian law and would not want to. What it might want is the ability to appear in India-seated arbitration for Chinese parties, and to hold a registered position rather than an ad hoc one. Whether that is available turns entirely on the methodology question above.

For an Indian firm, the position is symmetrical and rather more immediate, because Indian parties are already appearing in CIETAC and Hong Kong-seated arbitrations against Chinese counterparties, and the representative office route has been available to foreign firms in China for over two decades without Indian firms making much use of it.While US, UK, European, and Japanese firms opened hundreds of Ministry of Justice (MoJ)-licensed representative offices in Beijing and Shanghai, top-tier Indian law firms (e.g., CAM, SAM, Khaitan, AZB, Trilegal) almost entirely ignored the mainland Rep Office route. A few exceptions involved non-exclusive alliance desks (e.g., Singh & Associates partnering with Guangda in 2012) or temporary regional outposts (e.g., PSL in Hangzhou in 2019), but formal MoJ rep offices remained virtually non-existent. Because an Indian firm handling a China-seated dispute still has to instruct local Chinese litigation counsel, maintaining an expensive mainland office offered negligible return on investment.

Historically, Indo-China work was overwhelmingly inbound (Chinese corporates investing in India or exporting equipment to Indian buyers). Indian firms captured this work at the point of origin through roadshows, Singapore desks, or informal referral networks with major Chinese domestic firms (e.g., King & Wood Mallesons, AllBright, Grandall), making a permanent physical presence in Beijing redundant.

Also, reciprocity assessed against Hong Kong would produce a different answer from reciprocity assessed against the mainland, and the two are frequently treated as one jurisdiction in commercial practice and as separate ones in regulatory analysis.

Lawfinity Solutions advises international law firms on cross-border legal market positioning. If the India corridor is a live question for your firm, we would be interested in a conversation. Lawfinity works with one firm per jurisdiction. Engagements begin with a single conversation about your firm’s current position and where the corridor question is live for you. Write to Prachi Shrivastava

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