Regulatory reforms aimed at improving clarity, professional mobility, recognition of qualifications, and ease of doing business could help India unlock the full export potential of its professional services sector, according to a recent NITI Aayog report.
A Sector With Serious Growth Potential
The report, titled "India's Services Sector: Insights on Regulatory Regime in Professional Services," says professional services have emerged as a key component of India's broader services economy, carrying significant potential to strengthen the country's position in global services trade.
The numbers here are genuinely striking. India was the seventh-largest exporter of services globally in 2024, holding a 4.3 percent share of global services exports. Professional and management consulting services accounted for nearly 20 percent of India's total services exports in 2024-25, and professional services as a whole made up 19.7 percent of total services exports in 2023, recording a compound annual growth rate of 18 percent during FY15-FY25. As the report puts it, "professional services serve as critical enablers across the broader services sector and have immense potential to enhance India's share in global services trade."
A Patchwork of Regulations Across Professions
One of the report's key findings is that the regulatory framework governing professional services in India remains diverse and highly sector-specific. Professions such as medicine, law, accounting, and auditing services in India already have established legal and institutional frameworks in place. Other areas, however, including engineering, landscape architecture, and urban planning, are either lightly regulated or lack formal oversight entirely, creating an inconsistent regulatory landscape across the professional services ecosystem.
The report identified several regulatory conditions that can influence market entry and international competitiveness, including nationality and residency requirements, educational qualifications, licensing, recognition of foreign qualifications, and restrictions on permitted forms of establishment. Stakeholder consultations also flagged ongoing challenges related to qualifications, licensing, recognition of professional competencies, and sector-specific restrictions that continue to hold the sector back.
According to the report, "excessively restrictive regulations can create significant barriers for both domestic and foreign service providers," underscoring the need for a more streamlined, consistent regulatory approach.
A Four-Pronged Strategy for Reform
Against this backdrop, the report proposed a four-pronged strategy focused on continuous professional development, elevating professional services within the broader services value chain, adopting global best practices, and staying ahead of emerging industry trends.
It also outlined several sector-specific measures, including regulatory harmonisation and clarity, greater professional mobility, mutual recognition agreements, streamlined registration and licensing pathways, wider legal structures for professional practices, and phased accreditation pathways for foreign professionals looking to operate in India.
Sector-by-Sector Recommendations
For legal services specifically, the report called for recognition of legal professionals beyond just advocates, modernisation of legal forms of practice, and a review of existing advertising norms. In accounting and auditing, it highlighted the need for stronger regulatory oversight and skilling, recognising these as areas where India already has some institutional maturity but still room to grow. For architecture, the report suggested streamlined registration processes, professional examinations, and clearer mechanisms for recognising foreign qualifications.
For engineering, the report pointed to a notable gap, the absence of a comprehensive statutory framework governing professional practice, particularly for engineers involved in construction and related activities. It argued that a more structured framework in this space could significantly improve consistency, accountability, and clarity across the profession.
Why This Matters for India's Broader Growth Story
The report emphasised that these reforms should be accompanied by skilling initiatives, greater professional mobility, and adoption of global best practices, noting that the proposed measures "could increase the efficiency and output in professional services, which will in turn boost India's services trade."
Based on stakeholder consultations, key informant interviews, and analysis of trade and regulatory data, the study concluded that a globally competitive professional services ecosystem could strengthen India's high-skilled employment, entrepreneurship, and innovation potential, while supporting the country's broader services-led growth ambitions.
FAQs
Q1. What share of India's services exports do professional services account for?
Professional services accounted for 19.7 percent of India's total services exports in 2023, with professional and management consulting services alone making up nearly 20 percent of total services exports in 2024-25.
Q2. What regulatory gaps did the NITI Aayog report identify?
The report found that while professions like medicine, law, and auditing have established regulatory frameworks, areas like engineering, landscape architecture, and urban planning are either lightly regulated or lack formal oversight.
Q3. What reforms did the report recommend for accounting and auditing?
The report highlighted the need for stronger regulatory oversight and skilling in accounting and auditing, alongside broader reforms like regulatory harmonisation and mutual recognition agreements.