India - Licensing Requirements for Professional Services India - Licensing Requirements
In the last two decades, the services sector has made rapid progress and has emerged as the largest and one of the fastest growing sectors of the Indian economy. According to government estimates, the services sector accounted for 54 percent of India’s Gross value added and employed 28.6 percent of the total population in FY 2017-18, making it one of the driving forces of the Indian economy. Over the years, various policy reforms have taken place in India in several services sectors, such as banking and financial services, telecom services, air transport services, healthcare services, postal services, and other professional services. However, India still has restrictions on providing certain professional services by foreign nationals (including U.S. nationals). These limitations or restrictions are in terms of the number of services suppliers, service operations or employees in a sector, the value of transactions, the legal form of the service supplier, or the extent of participation of foreign capital. For example:
- For accounting and audit services there are many restrictions, but U.S. accounting firms have been able to navigate those by having a local (Indian) accounting firm as an affiliate.
- There are no restrictions for the practice of professionals in engineering, integrated engineering and construction services. However, foreign engineering and construction firms are generally not awarded government contracts unless local firms are unable to perform the work.
- International/U.S. architectural firms are not allowed to provide direct services in India. Foreign firms may only participate through joint ventures with Indian architecture firms. An Indian partner (i.e. registered Indian architect) must sign to get an architectural plan approved for a local project.
- Foreign law firms or foreign lawyers cannot practice the profession of law in India either on the litigation or non-litigation side, unless they fulfill the requirements of the Advocates Act, 1961 and the Bar Council of India Rules. However, foreign law firms (including U.S. firms) have been permitted to fly in and fly out for rendering advice on a temporary basis.
Nonetheless, India has been one of signatories to the WTO negotiations under the General Agreement on Trade in Services (GATS), which came into force on January 1, 1995. India is a proponent of the liberalization of trade in services, especially through Mode 4: Presence or movement of natural persons to provide services on a temporary basis in another country. Under the GATS framework, India has progressively made several commitments, and India is actively involved in comprehensive multilateral negotiations regarding trade in services.
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