India looks set to open up its legal market to international law firms as part of a raft of trade agreements reached between UK chancellor of the exchequer George Osborne and India's finance minister.

The long-awaited liberalisation plans come after Osborne and Indian counterpart Arun Jaitley met in London this week as part of the eighth UK-India Economic and Financial Dialogue, sealing a number of agreements, including opening up the legal market. 

In a joint statement the pair said: "Finance minister Jaitley has expressed his support for enabling foreign lawyers to establish a presence in India, provide legal advice on non-Indian law, and transact services as per regulations to be framed, and to employ and enter partnerships with Indian lawyers."

The statement said that the liberalisation would be introduced in "a phased manner". No timetable for liberalisation was given but the statement said it would be "progressed by the relevant authorities as a matter of urgency".

The UK Treasury hailed the agreement saying it would "bring new opportunities for the UK profession" and "act as a catalyst for international investment in India".

Liberalisation of India's legal market has been on the agenda for well over a decade, but despite high hopes among firms it has never come to fruition.

In 1999 Legal Week reported that the country was considering liberalising its legal market under pressure from the World Trade Organisation.

The country was a signatory to the WTO General Agreement on Trade in Services (Gats), which had required the country to liberalise its services sector by 2005, but this commitment wasn't fulfilled.

Between 2003 and 2008 the Ministry of Justice (MoJ) spent more than £100,000 on trips to India in its efforts to secure liberalisation.

Since then major firms' hopes that there might be progress on the issue have dwindled. In 2011 Clifford Chance ended its 'best friends' relationship with Indian leader AZB & Partners and the next year Allen & Overy called time on its referral relationship with India's Trilegal. Both firms said the lack of progress on liberalisation had been a factor in their decision.