NITI Aayog, India's premier public policy think tank, has unveiled a comprehensive four-pronged roadmap designed to significantly boost the nation's professional services sector. The strategy aims to address existing regulatory gaps, enhance global competitiveness, and position India as a leader in high-value, knowledge-intensive services.
The report, titled "India’s Services Sector: Insights on Regulatory Regime in Professional Services," highlights the critical role professional services play in India's services-led growth. India currently stands as the seventh-largest global services exporter, with professional and management consulting services alone contributing nearly 20% of total services exports in 2024-25, growing at an impressive 18% CAGR between FY15 and FY25.
Addressing India's Regulatory Landscape
Despite strong growth, NITI Aayog identified a key challenge: the lack of a uniform regulatory regime across professional services. While sectors like medicine, law, and accounting have detailed frameworks, others such as engineering, landscape architecture, and urban planning face light regulation or a complete absence of formal oversight.
The report utilized benchmarks like the OECD Services Trade Restrictiveness Index, noting India's high restrictiveness scores in legal (0.865), accounting (0.762), and architecture (0.537) services. These scores indicate significant barriers compared to international jurisdictions, hindering India's potential for global leadership.
Sector-Specific Reforms Proposed
- Legal Services: NITI Aayog calls for an expansion of statutory recognition beyond just advocates to include in-house counsel and legal process outsourcing professionals. It suggests allowing multidisciplinary practices and private limited law firms, with appropriate safeguards. Modernizing advertising rules to permit responsible use of digital platforms and establishing mandatory continuous professional development are also key recommendations.
- Accounting & Auditing: To enhance global mobility and competitiveness, the report advocates for expanding mutual recognition agreements (MRAs) with international accounting bodies. It also proposes a comprehensive regulatory framework for bookkeeping, covering qualifications, ethical standards, and formal training.
- Architecture: Reforms include introducing a mandatory professional examination for architects to standardize competency assessment and streamlining the registration process, which is currently fragmented by local authorities. Allowing a wider range of legal structures like LLPs and pursuing MRAs for international recognition are also suggested. Landscape architecture, in particular, requires a dedicated legal framework for professional practice.
- Engineering: While generally open with 100% FDI, the sector lacks a central statutory framework for engineers involved in construction. NITI Aayog recommends establishing such a framework to set minimum standards, ethical codes, and accountability mechanisms, especially where public safety is concerned.
- Healthcare: The report highlights administrative requirements that restrict the interstate mobility of medical practitioners and allied health workers. It urges full implementation of the National Commission for Allied and Healthcare Professions Act, 2021, across all states and the introduction of the mandated National Exit Test (NExT) to standardize competency. Expanding mutual recognition arrangements for healthcare professionals is also a priority.
NITI Aayog's Four-Pronged Strategy for the Future
To address these challenges and capitalize on emerging opportunities, NITI Aayog proposes a strategic framework built on four pillars:
- Continuous Professional Development: Emphasizing lifelong learning and upskilling to help professionals adapt to rapidly changing technologies and global market demands, moving beyond initial qualifications.
- Elevate Professional Services within the Services Value Chain: Strengthening the foundational role of professional services in supporting diverse sectors like manufacturing, construction, and agriculture, thereby driving high-value employment and exports.
- Adopt Global Best Practices: Improving regulatory clarity, enhancing professional standards, and facilitating the recognition of Indian qualifications internationally. This involves learning from global approaches to boost competitiveness.
- Advance Emerging Trends: Proactively leveraging transformative trends such as artificial intelligence (AI), sustainability, and adapting to geopolitical shifts. The report envisions India moving from back-end execution to AI-enabled decision-making and developing proprietary tools in areas like financial modeling and legal analytics.
By implementing this roadmap, India aims to transition its professional services from a cost-driven model to one characterized by high-skilled expertise, innovation, and global integration, aligning with the ambitious Viksit Bharat 2047 vision.