India’s economy has scaled—crossing $4 trillion and moving steadily towards $10 trillion—but its consulting firms have not. This constitutes a critical gap as it means India still does not have globally competitive, Indian-owned consulting and professional services firms. That’s no longer a business inconvenience. It is a strategic vulnerability.
In 2017, the Prime Minister urged Indian Chartered Accountants to build global-scale firms—India’s own equivalents of the “Big Four.” The vision was sound. But vision alone does not create institutions. Markets, by themselves, will not solve this problem.
What is required now is deliberate reform, where long-term national interest outweighs short-term comfort. As early as 2003, thinkers like S. Gurumurthy had warned that India would remain dependent unless it built large domestic professional institutions.
Modern power is exercised not only through military strength or trade, but through knowledge infrastructure—audit, consulting, legal advice, compliance, data, and standards. The Ukraine conflict made this reality unmistakable.
Global accounting and consulting firms exited Russia overnight, not because contracts failed, but because strategic alignment overrode commercial logic. With the exception of China, most non-Western economies, including India, have yet to fully absorb this lesson. A nation that does not control its own knowledge intermediaries remains structurally exposed.
India has also made a fundamental error by treating consulting as a single problem. It is not.
The private sector operates on reputation, fiduciary defensibility, and signalling. The public sector operates on precedent, process, and post-facto accountability. Reform must recognise this distinction. A single solution applied uniformly will fail.
There are only two ways to build large consulting firms. The first is top-down: creating or backing a large, professionally managed consulting platform and scaling it through capital, acquisitions, and branding.
The second is bottom-up: enabling legacy Indian professional firms—especially audit-led firms with decades of domestic trust—to grow organically into large institutions.
Both paths are legitimate. But the second path carries a hard structural truth: large consulting firms cannot be built bottom-up without first building large audit firms.
Audit is not just another service line. It is the credibility engine of the professional ecosystem. Audit firms gain access to boards, regulators, capital markets, banks, and public institutions. Without an audit scale, consulting remains peripheral and episodic rather than institutional. This is why audit concentration matters far beyond an audit.
Today, a dominant share of India’s market capitalisation continues to be audited by global networks. This is not purely market-driven. Shareholder agreements, investor mandates, and internal governance practices routinely insist on specific global firms—even when Indian investors are involved.
The consequence is predictable. Indian audit firms, regardless of quality, are denied the opportunity to scale. Without an audit scale, the bottom-up pathway to Indian consulting giants remains structurally blocked.
Past interventions—such as joint audits—were weakly enforced. India’s FDI rules acknowledge that foreign investors may insist on a particular auditor and address this by allowing joint audits, so that an Indian firm remains part of the audit process. This balancing mechanism existed on paper but was never implemented with seriousness. Episodic measures cannot substitute for structural reform.
A narrow but firm legal reset is therefore essential. Contractual clauses mandating auditors from specific networks must be clarified as void against public policy under the Companies Act, 2013. At the same time, the interpretation of the Chartered Accountants Act, 1949, must clearly separate genuine independence safeguards from artificial barriers that prevent firm aggregation and scale. Neutral auditor selection is not dilution. It is the foundation for building large Indian audit firms.
As Indian audit firms gain scale, they must be allowed to build consulting capabilities for non-audit clients. This was the intent behind Multi-Disciplinary Partnerships, yet progress has been limited. The principle itself is settled: an auditor must never audit his own advice. Section 144 of the Companies Act rightly makes this non-negotiable. The challenge lies in regulatory posture. Oversight should focus on assurance quality and independence, while allowing non-audit and consulting services to grow in parallel, subject to conflict rules and reporting where required.
At the centre of this ecosystem sits the Institute of Chartered Accountants of India. The issue here is not intent, but governance design. Leadership and committees operate on one-year cycles, making sustained, multi-year reform difficult. This is not a criticism of individuals, but a recognition of structural constraint.
The core challenge facing Indian consulting firms is not a lack of capability, but a lack of confidence at the point of selection. In the private sector, boards and investors often choose global brands because they are easier to defend later. In the public sector, officers choose familiar names because precedent feels safer. In both cases, capable Indian firms remain invisible.
India already knows how to solve this problem in audit, where chartered accountant firms are benchmarked before appointments in public sector audits by the CAG. Consulting lacks such a neutral reference point. A national framework for benchmarking consulting firms is essential—not to pick winners, but to reduce information asymmetry and enable confident decision-making.
A recent Maharashtra empanelment shows how this can work in practice. Firms were grouped across private, Section 8, and academic categories. Assignment values were meaningful, empanelment cycles were time-bound, and firms were given repeat opportunities to qualify. Replicated nationally, this model balances confidence with competition.
India does not lack talent or ambition. It lacks institutional alignment. Audit scale, role clarity, neutral benchmarking, and continuity in reform are not abstract ideas. They are the preconditions for building global institutions. 2026 must be the year India reclaims control over its knowledge infrastructure.
The author is a Chartered Accountant and a Non-Executive Director at the Centre for Accounting and Financial Excellence.
The opinions expressed in this article are those of the author and do not purport to reflect the opinions or views of THE WEEK.