The National Post is reporting that India is now open to foreign law firms in a limited way. The Post has its information from Dezan Shira & Associates whose "briefing note" of a week ago makes it clear that the Limited Liability Partnership Act 2008 [PDF] permits foreign firms to register and offer "consultation services" but not practice law. It seems that the Bill has received presidential assent.
S.59 is the relevant enabling section and reads as follows:
59. The Central Government may make rules for provisions in relation to establishment of place of business by foreign limited liability partnerships within India and carrying on their business therein by applying or incorporating, with such modifications, as appear appropriate, the provisions of the Companies Act, 1956 or such regulatory mechanism with such composition as may be prescribed.
A memorandum [PDF] on the website of the Ministry of Corporate Affairs refers to "concept rules," which would presumably clarify the situation, and though they are said to be on the MCA site, I wasn't able to find them.