Consulting Industry in India: Prospects & Challenges

By Sandeep Budhiraja, Chief Executive Officer, DOOR Training & Consulting India

Over the Years, the Indian consulting industry has seen a substantial growth, not only in terms of size, but also in terms of the service offerings. In recent years, the demand of specialist consulting services is being immensely sought by customers in India, which has eventually opened the opportunity for a large number of consultants to help businesses with expert knowledge base and resources. Due to constantly increasing demand, the industry is estimated to grow at a compounded annual growth rate of 30 percent to become a Rs 27,000 crores industry by 2020, as per the reports of The Associated Chambers of Commerce and Industry of India (Assocham).

As of now, there are about 6000 consultancy firms in metropolitan cities including Delhi (25.7 percent) followed by, Mumbai (25.5 percent), Chennai (12.1 percent) and Kolkata (9.1 percent). Moreover, service sector contributes more than 50 percent to nation’s GDP. Besides, there are around 2000 R&D institutions and laboratories supporting several domestic consultancy organizations directly or indirectly at a reasonable cost.

This fast growth of this sector in India is largely attributable to improved investment activities because of low-cost structure, entry of many big players into the Indian market, relaxation of previous FDI restrictions, and strong capabilities in areas like IT, management, civil engineering, telecommunication, petrochemicals, power and metallurgy. The steady growth will ultimately lead to expected rise in hiring activities.

The president of Assocham, Venugopal Dhoot, said that the countries worldwide including the United States of America, the United Kingdom, China, Japan, Saudi Arabia, and Gulf nations acknowledge the competency of Indian consultancy firms, with their ever growing demand in the EU as well. He further mentioned the demand growth of Indian consultancy firms in view of their competitive edge over their counterparts in the ASEAN countries that include Germany, Italy and France.

The Demand of Consulting Services in India

Due to the involuntary reduction in workforce, many organizations lack the technological, strategic and project management abilities to handle market and technical changes in the ever growing market. Therefore, currently, the business world desperately needs consulting assistance.  It is projected that by the next three years, there would be more than 2.2 lakh people getting employment in almost 10,000 consultancy firms across the nation.

Owing to the shortage of enough qualified people, some consulting firms have already devised creative solutions by launching their own accredited MBA programs. Many people are inclined towards this profession because of its heightened demand and visibility, along with enticing salary packages.

The Major Strengths of the Industry

The major strengths that set Indian consultancy firm above the consultancy organizations of developed economies are professional competence, low-cost structure, high acceptability, flexible thinking, high learning agility, strong interpersonal skills, focused approach and overall business understanding. Moreover, their expertise in diverse areas and familiarity with the local conditions are a few other reasons that help them to score over the global players. However, the Indian consulting sector has some shortcomings, which have  been hindering the export growth such as limited local presence in a foreign country due to lack of intensified market expertise, low quality assurance, low brand equity, lack of strategic tie-ups, insufficient international experience of Indian Consultants working overseas, and low level of R&D. Despite these limitations, the consulting sector in India is responding creatively to the changing needs of the clients and seeking innovations to meet their future needs.

The adoption of best practices data warehousing, knowledge management tools and internet ensures the faster growth of this industry in near future. Despite the expansion of the consulting organizations, the size of individual firms is growing in response to another industry trend. Consulting firms that are unable to compete on size are trying to fulfill the clients requirements by outsourcing their project to another firm while maintaining responsibility for the overall project.

Management Consulting Industry– A Major Contributor

Indian management consulting industry is one of the fastest-growing industries, fuelled by the advancement in technology and rapid adoption of mobile devices. This sector includes areas like telecommunications, e-commerce, software designs, hardware systems design and implementation, intranet and internet schemes and functionality, and website development and operation. The multiple layers of management consulting sector cater to a distinct set of needs. TCS, Wipro, Infosys, are a few major IT industries in India competing with major contenders in the global IT sector.

Challenges For Indian Consulting Organisations

Keeping in mind the differences of the domestic market in India with respect to the Global market, the major challenges Indian Consultants usually face in India are:

Competition and differentiation: The biggest challenge for the Indian consulting firms is to compete with the global players in the market. There is need for Indian consultancy sectors to define their specializations and differentiate themselves from their competitors.

Adoption of New Organizational design: With increasing globalization of consulting firms, Indian consultancy sectors need to adopt new organizational design that best suit their contexts and identities.

Outsourcing to India acts as a challenge as well as driver: Though outsourcing assists development and globalization, many Indian consulting firms find that it restrains their growth in the outsourced regions.

Managing the Knowledge Flows: The firms have a challenge to leverage the organizational knowledge efficiently so that there would be a proper balance between utilization of existing knowledge and creating new knowledge.


The Consulting Industry in India is growing at fast pace and soaring new heights all across the world. This time, it is required to make an action plan to exploit the tremendous potential available for growth of consulting market. Also, there is a need to strengthen the framework of Indian consulting industry by embracing innovation, nurturing talent, improving the quality of consulting services, and enhancing consulting skills. 

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