27 Asian Legal Business | January-February 2025 from tariff barriers to service trade supervision and non-tariff barriers.” On the bright side, Pan emphasises emerging opportunities in green trade cooperation, particularly in sectors like “new energy vehicles, photovoltaic, and battery products,” alongside digital trade initiatives. (SW) Hong Kong As Hong Kong continues to solidify its position as a global financial and technological hub with a closer connection to mainland China, the legal service industry is poised to play a vital role in shaping the city’s future. In the financial services sector, regulatory updates and evolving market dynamics are driving significant transformation. “The implementation of Basel III revisions will introduce stricter capital adequacy and liquidity requirements, pushing banks to strengthen compliance frameworks,” says Brett Stewien, partner at GPS Legal. Simultaneously, the expansion of the Mutual Recognition of Funds scheme between Hong Kong and Mainland China is expected to enhance crossborder investment opportunities, particularly for environmental, social and governance (ESG)-focused products, Stewien notes. The SAR government is also expected to continue its efforts to bolster Hong Kong’s technological development and foster innovation. A major step in this direction is the opening of the Hetao Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone. However, while this initiative is expected to drive growth and innovation, “businesses operating in the zone will face legal challenges related to intellectual property protection, cross-border data sharing, and differing regulatory standards,” Stewien cautions. Meanwhile, there are new movements anticipated in the dispute space especially in the construction industry, with the Construction Industry Security of Payment Ordinance set to come into effect in August this year. “This legislation will have a profound impact on the construction industry, introducing a mandatory rapid adjudication process for resolving payment disputes,” says Tom Fu, partner at JSM. This will require industry participants to adapt to new regulatory requirements and navigate the complexities of the adjudication process. Looking ahead, the use of AI in legal practices is expected to become increasingly prevalent, and Fu anticipates that this trend will be governed by new legislation in Hong Kong. This may include strengthening regulations regarding client data privacy and establishing professional standards for the ethical use of AI by legal professionals. (SW) India As India pursues its $5 trillion economy goal, its regulatory environment is evolving rapidly, creating new opportunities in AI, manufacturing, and infrastructure while tightening compliance in data protection, financial regulation, and ESG. Avimukt Dar, founder of IndusLaw, identifies key regulatory focus areas: “Data privacy, artificial intelligence, agriculture, civil aviation, offshore (GIFT City) and onshore AIFs.” A comprehensive data privacy framework is at the top of the the regulatory agenda. “This far-reaching legislation will not only impact tech players but also sectors such as real estate retail and pretty much any business which collects significant amounts of personal data in the ordinary course of business,” explains Dar. Agricultural reform remains another key focus area, with the government preparing for another attempt at reform following the repeal of contentious farm laws in 2021. Proposed changes aim to boost market access and private investment in the sector. India is also considering liberalisation of its stance on foreign investments from neighbouring countries, particularly China. “There is an expectation that FDI may be reopened from a China perspective and Press Note 3 may be liberalised over the course of the year,” Dar says. This could open new avenues for foreign capital, injecting fresh momentum into various sectors like manufacturing and technology while balancing national security considerations. India’s strong domestic participation in capital markets, makes it less vulnerable to global shifts and consequently more attractive to international financial institutions. This trend is likely to continue into 2025, despite an anticipated year-end market downturn that may persist through the first half of the year. Aligned with this ‘going-public’ trend is a slew of reverse flips into India, reduction in regulatory timelines, and increased use of technology by regulators. One can expect a significant uptick in both AI infrastructure as well as virtual digital assets, adds Dar. “The former because generative AI will be transformative across all industries and the latter due to the resilience of these assets and the changes currently happening in the US administration,” says Dar. The electric vehicle sector is set for rapid growth as well, propelled by the government’s ambitious target of achieving 30 percent EV sales by 2030. This growth extends to the entire EV ecosystem, including battery manufacturing and charging infrastructure, although concerns around U.S. President Trump’s stance on renewable energy may bring about increased cautiousness. 2025 Outlook
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