The Labor Party's momentous decision last weekend to back Prime Minister Julia Gillard's plans to export uranium to India could have significant results for Australian law firms. Claire Cha­ffey reports

This is the Asian century.

We've all heard the catch cry which has become part and parcel of Australia's growing push to engage in business and strengthen diplomatic ties with our Asian neighbours.

Last weekend, Julia Gillard took this to a whole new level, convincing the Australian Labor Party (ALP) to endorse her plans to lift a ban on the export of uranium to the world's fifth-largest economy: India.

"We are at the right time in the history of the world to seize a new era of opportunity in this, the Asian century," said Gillard at the ALP's national conference in Sydney.

"We need to make sure that across our regions we have the strongest possible relationships we can, including with the world's largest democracy, India."

While the controversial move has been fiercely opposed by numerous Labor ministers, who say exporting uranium is dangerous because India is not a signatory to the Nuclear Non-Proliferation Treaty, there is talk that any such deal could have beneficial outcomes for the Australian business community - and thus Australian law firms.

You're not welcome here

At present, foreign law firms are not permitted to practise law in India.

Despite a barrage of law firms from various jurisdictions eager to do so, the Indian legal profession - led by the Bar Council of India - has thus far stood firm against mounting pressure from the United Kingdom, United States and Australia to relax their legal services market restrictions.

Late last month, the head of the Society of Indian Law Firms, Lalit Bhasin, told India-based legal news site Bar & Bench that the entire Indian legal profession is against the entry of foreign law firms.

"I always ask, 'Why should we open?' There has to be a good reason, some rationale - what is the rationale? Who needs the legal services industry to be opened up? Does the Indian business industry want it? Does the Indian legal profession want that?" he said.

"Foreign law firms should consult Indian law firms if they need advice on Indian law. There is no need for them to set up offices here in India ... The entire legal profession in India is completely opposed to the entry of foreign law firms."

Pressure points

Despite such overt opposition, there have been recent indications from the Indian Government that the restrictions in the Indian Advocates Act 1961 and Bar Council Rules 1975 (which provide that, with certain exceptions, foreigners are restricted from offering legal services to the Indian market) might be relaxed.

On 26 September this year, Indian Law Minister Salman Khurshid said, at a seminar on UK-India cooperation on emerging legal issues, that the Indian and UK Governments were in the throes of working towards enhancing "the level of ... cooperation and contribution in the most meaningful way for advancement of legal services in our two countries."

And things might be about to change for Australia too.

According to Sydney-based Freehills partner Nicola Yeomans, the decision to go ahead with negotiations regarding the export of uranium to India could significantly strengthen relationships between the two countries.

"The standing of Australia was considerably assisted by the Prime Minister calling for Australia to export uranium to India," she says. "We may see this flow through to a closer diplomatic connection between the two nations and a greater Indian interest in Australia as a business destination."

Co-head of Clayton Utz's India practice, Stuart MacGregor, agrees with Yeomans and says the deal may even go some way to opening the doors to Australian law firms. "The opening up of the legal services [market] in Australia and India has been discussed in the proposed Free Trade Agreement (FTA), including in the July 2010 FTA feasibility study," he says. "There is recent speculation in the press that the FTA will again be fast-tracked if the Government agrees to change their current policy on selling uranium to India. So it will be interesting to see if professional services are dealt with in the FTA."

A beautiful friendship

While Australian firms are currently forbidden from practising in India, numerous firms have developed long-standing relationships with Indian firms.

"Our Indian Services Group was launched in 1995. We have strong relationships with key government stakeholders, leading legal and accounting firms, and have represented a number of India's largest corporations in relation to their Australian and Asia-Pacific projects," says MacGregor.

"We regularly have partners on the ground in India establishing new, and strengthening existing, contacts ... We have sent solicitors to India on secondment and in return we have Indian lawyers on secondment at Clayton Utz. We currently have a senior associate from Amarchand & Mangaldas in Delhi in our Brisbane energy and resources group."

Despite a significant interest in India, however, MacGregor insists that the firm is not looking to open an office there, should the doors be opened in the future.

"Clayton Utz is not looking to practise in India," he says. "We prefer to let our local Indian specialist firms do the work in their jurisdiction."

Insatiable India

Undoubtedly, Australian firms are being lured to India by the prospect of working on significant energy and resources deals as India aggressively pursues Australian and Indonesian natural resources.

"Our main role is to provide commercial advice to Indian clients seeking to invest in Australia and South East Asia," says Yeomans. "For example, we acted for Tata Steel on its investment in ASX-listed Riversdale Mining, on its Mozambique joint venture with Riversdale Mining, and on Tata Steel's response to the $3.6 billion takeover bid of Riversdale Mining by Rio Tinto."

Given the rate of India's growth, these deals are likely to continue for some time yet, even in the face of global economic meltdown. "The Indian economy continues to display very substantial growth and given so much of it is internally generated I think it should continue to grow in the face of any slowdown in the European or US economies," says Yeomans.

According to MacGregor, India is becoming an increasingly significant piece of the energy and resources pie for Clayton Utz. "India is a very important market for us," he says. "Exports only represent 15 per cent of India's economy so most of India's growth, like China, is from domestic markets. India is the second largest importer of Australian Coking Coal after Japan and there is a significant shortfall in thermal coal supplies for India."

On the same page

As well as a huge demand for energy and resources in the region, working with or within India also makes sense for Australian firms from a cultural point of view.

"Australia and India have much in common, including their British common law heritage," says MacGregor. "We see more similarities than differences."

And as Gillard forges ahead with her plans to implement the uranium deal - which Labor Senator Doug Cameron has labelled "one of the worst decisions the Labor Party has ever made" - Australian firms will be keeping a close eye on the Indian legal services market.