NITI Aayog has emphasized the critical need for well-designed regulatory ecosystems to strengthen India's professional services sector. According to reports from Business Standard, the think tank launched the third report under the Services Thematic Series at the forum of the High-Powered Education to Employment and Enterprise Standing Committee. The report, titled India's Services Sector: Insights on Regulatory Regime in Professional Services, presents a unique factual assessment of India's regulatory framework in professional services and benchmarks it against select foreign jurisdictions. Ashok Kumar Lahiri, Vice Chairman, NITI Aayog, launched the report on August 10 at the forum, with NITI Aayog CEO Nidhi Chhibber and Dr Saurabh Garg, Secretary, Ministry of Statistics and Programme Implementation (MoSPI) also present at the launch. The event brought together senior officials from central and state governments, industry associations, and experts from academia as members of the High-Powered Committee. As per IANS, the latest report provides an indicative pathway for future policy dialogue and deeper examination of the regulatory foundations of professional services, drawing on extensive stakeholder consultations to identify key challenges and outline a way forward.
As India approaches its demographic peak, professional services offer significant opportunities for high-skilled employment, entrepreneurship and innovation, as reported by Business Standard. The latest report from NITI Aayog proposes a four-pronged strategy focused on harnessing emerging trends to transform professional services, elevating the role of professional services within the broader services value chain, adopting global best practices and promoting continuous professional development. Professional services can provide a "high-skilled, high-value avenue for employment, entrepreneurship, and innovation" and help India expand its footprint in global services trade, according to the report. Professional services account for nearly a quarter of the country's total services exports, highlighting their critical role in India's services economy as high-value and knowledge-intensive activities that support efficient delivery of downstream services, generate employment and contribute to remittance inflows. The report emphasizes that these services are "high value-added and knowledge-intensive activities such as legal, accounting, auditing, architectural, engineering, management consulting, and medical services" that are characterized by high barriers to entry, information asymmetry, and reliance on trust and reputation. As India advances towards 'Viksit Bharat at 2047', such efforts will be integral to building a globally competitive, inclusive and future-ready services sector, as noted by NITI Aayog.
India's engineering services sector has demonstrated remarkable growth, with engineering services exports rising from $1.77 billion in 2014-15 to $13.77 billion in 2024-25, representing a compound annual growth rate (CAGR) of 22.8% during this period, according to the latest NITI Aayog report. However, the report identifies a critical regulatory gap, noting that India does not have a proper regulatory framework for the engineering profession, despite the strong export performance. This contrasts with professions such as architecture and medicine, which have established regulatory frameworks. Engineering services imports, however, saw little change, rising from $1.59 billion in 2014-15 to $1.73 billion in 2024-25, growing at a CAGR of only 0.9%. The report highlights that between 2015 and 2022, engineering made up 67.2% of all technical degrees, as cited in the India Employment Report 2024, demonstrating the sector's importance as a career choice in India. Despite the strong growth in engineering services exports, the government and professional bodies have made several attempts to bring in a law for engineers through an Engineers Bill, as noted in the report.
The first pillar of NITI Aayog's strategy focuses on continuous professional development as technology increasingly transforms professional work. The report emphasizes that "the focus is not just on initial qualifications but on helping professionals keep pace with changing standards, technologies and global market requirements." The second pillar involves elevating professional services within the wider services value chain, where professional services support businesses across manufacturing, construction, agriculture and other services while contributing to exports and high-value employment. The third pillar calls for greater adoption of global best practices, including improving regulatory clarity, strengthening professional standards, facilitating recognition of qualifications and examining international approaches. The fourth pillar focuses on advancing emerging opportunities that could reshape professional services, particularly highlighting artificial intelligence, sustainability and geopolitical changes. Professional and management consulting services alone accounted for nearly 20% of India's total services exports in 2024-25, demonstrating the sector's growing importance in India's services-led growth strategy. As per Business Standard, the report emphasizes that a better understanding of the regulatory ecosystem is essential for unlocking further growth in professional services and strengthening India's position in global markets.
The report includes comprehensive sector-specific reforms to modernize professional services and addresses multiple regulatory challenges. Accounting and auditing services exports grew from $617 million in 2014-15 to $3.324 billion in 2024-25, according to RBI data cited in the report. The report recommends expanding mutual recognition agreements with international accounting bodies to help Indian qualifications gain recognition abroad while enabling reciprocal access for foreign professionals. India was the seventh-largest global services exporter in 2024 with a 4.3% share of global services exports, up from 2% in 2005, with professional services making up 19.7% of India's services exports in 2023 and growing at an 18% CAGR between FY15 and FY25. The report emphasizes that a well-designed regulatory framework could help expand services exports, facilitate the cross-border mobility of professionals and improve the ease of doing business. The report calls for greater professional mobility through Mutual Recognition Agreements (MRAs), streamlined licensing and recognition of qualifications, noting that regulatory inefficiencies can impede the mobility of Indian professionals and reduce the sector's global competitiveness. As per Business Standard, the report is intended to serve as an indicative roadmap for future policy discussions and more detailed examination of the regulatory foundations of professional services.
