Professional Services and Talent Market - Newspaper Summary

 The sources offer a comprehensive look at the Professional Services and Talent Market in October 2025, emphasizing India's established role as a global knowledge hub, the challenges domestic firms face in scaling up, the massive impact of Artificial Intelligence (AI) investments, and ongoing shifts in the talent landscape, particularly within the legal and technology sectors.

Professional Services & Talent Market

1. India as a Global Knowledge Hub and its Comparative Advantage

India holds a powerful position in high-skill service exports, a competitive advantage rooted in its vast human capital.

• Sector Growth: The Gross Value Added (GVA) in the professional, scientific, and technical services sub-sector has nearly tripled in the past decade, increasing from about ₹30,000 crore in the financial year 2013-14 (FY14) to ₹84,000 crore in FY24.
• Export Dominance: India has emerged as a global hub for high-skill service exports.
  • The country's Revealed Comparative Advantage (RCA) in professional and management consulting services in 2024 was 2.99, meaning its exports in this area are nearly three times the world average. This surpasses advanced economies like Singapore (1.96), the UK (1.44), and the US (1.24).
  • In 2024, India exported $125.7 billion worth of consulting services, accounting for about one-third of its total services exports of $374.9 billion.
• Talent Pool: This strength is anchored in India’s human capital—a vast pool of engineers, MBAs, and chartered accountants who are technically proficient, speak English, and are available at affordable wages, capable of working across time zones.
• The Paradox of Talent: Despite producing these highly skilled professionals, the expertise of many is primarily channeled by foreign multinationals through Global Capability Centres (GCCs), rather than powering large Indian companies. India hosts over 1,800 GCCs, a number expected to climb to 2,400 by 2030, with the domestic GCC market projected to reach $110 billion by 2030.

2. Challenges for Domestic Professional Services Firms

The government is exploring ways to nurture Indian champions in professional services (consulting, audit, advisory, ESG) capable of rivaling the global "Big Four" (EY, KPMG, Deloitte, and PwC). However, domestic firms face significant structural and regulatory hurdles:

• Fragmentation and Lack of Scale: Indian firms are generally small and fragmented compared to the Big Four. Of the roughly 95,000 accounting firms registered with the Institute of Chartered Accountants of India (ICAI), nearly 70,000 are proprietorships or sole practitioners. Only about 28% are partnership firms, and a mere fraction (about 400) have more than 10 partners.
• Regulatory Constraints: Current rules restrict the formation of multidisciplinary partnerships, limiting firms' ability to offer integrated, full-service solutions like their international counterparts.
• Brand Building: Strict regulations on advertising and branding also stifle growth, making it harder for domestic firms to build visibility and compete globally.
• International Dominance: The Big Four dominate the global consulting and auditing space, with their combined global revenue reaching $212 billion in 2024. In India, the largest listed companies rely heavily on these international firms, which audit more than two-thirds of the Nifty 500 companies, due to their strong brand reputation and global credibility.

3. Impact of AI on the Talent Market and Business Strategy

AI is fundamentally reshaping talent demand in technology and consulting sectors, leading to massive strategic investments in infrastructure and a shift in required human skills.

• Shift in Consulting Skills: The rise of AI is raising questions about the need for human consultants. However, human expertise remains essential for advanced functions like strategic recommendations, integrated judgment, and solving complex business problems. Consequently, consulting firms are seeking professionals who excel in higher-value, strategic work.
  • AI tools like GPT-4 lead to massive performance gains, particularly for below-average consultants (e.g., a 43% gain in task completion speed and a 40% increase in total tasks completed for routine tasks).
• Massive AI Infrastructure Investment: Big Tech's announced AI infrastructure bets in India have reached $25 billion this year.
  • Google committed $15 billion to establish its biggest AI hub outside the US in Visakhapatnam.
  • Amazon Web Services (AWS) announced a $6.8 billion outlay for data centers in Hyderabad.
  • Microsoft announced a $3 billion investment for cloud and AI infrastructure.
• IT Services Pivot (TCS vs. Peers): This boom drives strategic decisions among Indian IT giants:
  • TCS is making a massive $6.5 billion investment over six years to build 1 GW of new data center capacity, marking a shift toward owning the physical infrastructure that powers AI. This asset-heavy approach contrasts with its traditional model and the strategies of its peers.
  • HCL Technologies reported that its advanced AI-led revenue exceeded $100 million in Q2 FY26, forming 3% of its total annualized revenue. HCL’s AI strategy is rooted in an asset-light framework centered on IP creation and service transformation, contrasting with TCS’s capex-heavy plan.
  • Tech Mahindra is focusing its investment on talent rather than data centers and is partnering to develop an indigenous, sovereign, large language model with 1 trillion parameters.

4. Talent Market Dynamics: Legal Sector and Workforce Welfare

The professional talent market is also seeing shifts in diversity and policy changes related to the wider workforce:

• Gender Diversity in Law Firms: India's top law firms are actively working to hire and promote more women into partner and senior partner roles, aiming to build more "empathetic" and "collaborative" relationships with clients.
  • Firms like Trilegal saw women account for about 42% of all new partners who joined the all-equity partnership over the last five years.
  • Khaitan & Co. promoted 75 women to partnership roles since 2020.
  • Shardul Amarchand Mangaldas & Co. (SAM) added 66 women partners (salaried and equity) over the same period, with women constituting nearly 51% of their total lawyers.
  • Firms are supporting this shift with policies such as three weeks of paternity leave, additional childcare leave, and continued hybrid work options.
• EPFO Changes (Workforce Policy): Major changes proposed by the Employees' Provident Fund's Central Board of Trustees aim to simplify partial withdrawals by grouping the previous 13 conditions into three broad categories and increasing the number of withdrawals permitted for education and marriage. However, the proposal to increase the waiting period for full final settlement after leaving a job from two months to 12 months may make it harder for those quitting or seeking a clean slate.
• Skill Development and Livelihoods: Andhra Pradesh’s urban poverty mission (MEPMA/MAPMA) highlights extensive efforts to link skill development with formalization and market access for vulnerable groups. This includes:
  • Empowering Urban SHGs via Skill Development, converting experience into certified competence through programs like NSDC’s RPL-3 (Recognition of Prior Learning).
  • Integrating trained professionals (electricians, plumbers, etc.) into the Gig Economy through platform partners (like Home Triangle), providing a live demand engine for SHG households.
  • Helping Vulnerable Occupational Groups (like gig workers, domestic staff, and sanitation workers) form Common Interest Groups (CIGs) and link them to finance, skilling, and welfare programs.