As mentioned in yesterday’s Monday Morning News Brief, the Prime Minister’s Office in India has convened a meeting to discuss what regulatory hurdles they’d have to jump in order to create a domestic competitor to Big 4. That’s according to people familiar with the matter who talked to Economic Times so, you know, take it with a grain of turmeric. As it stands, there are legal restrictions preventing the creation of multidisciplinary firms in India and, as the Ministry of Corporate Affairs pointed out in a recent request for public comment on the creation of domestic multidisciplinary firms, that means the real firms are hogging all the talent. India wants a piece of their own.
We only started hearing buzz about this plot to create homebrewed Big 4 a year or so ago but as it turns out, Prime Minister Narendra Modi has been talking about it since 2017. “People talk of the Big 4 accounting firms. Sadly, there is no Indian firm there. By 2022, let us have a Big 8, where 4 firms are Indian,” he said seven years ago. See, no one was paying attention back then because back then firms weren’t sending 65% of their work overseas.
When this article first landed on our radar last year, our tweet went fairly unnoticed:
Everyone should be aware that India is talking about merging some of its 96,000 accountancy firms together to make behemoth firms that could compete with Big 4.https://t.co/xOqjkd1Nqf
— Going Concern (@going_concern) May 3, 2024
Honestly, we didn’t think it was more than them talking out loud in the same way one expresses they would like to win a $55 million lottery jackpot. It seems now that India is proceeding with at least preliminary high level discussions about how to handle the regulatory logistics.
A few days before the prime minister’s comments, the Ministry of Corporate Affairs (MCA) solicited public comment on the “establishment of Indian Multi-Disciplinary Partnership (MDP) firms.” It was a bit tough tracking it down on their website, we’ve plugged the full PDF below. Highlights are as follows:
The global consulting and auditing industry is valued at nearly $240 billion, dominated by international networks and global strategy majors. Despite India’s world-class talent pool, domestic firms remain marginal players, particularly in high-value audits and consulting, partly due to structural and regulatory barriers.
India’s leadership has repeatedly emphasized the need to build indigenous professional service giants. While government efforts so far have largely concentrated on the auditing sector, it is equally important to prioritise the consulting business, which represents a far larger share of the revenue potential and strategic influence in the professional services industry. The recent FTAs of India has opened opportunities for Indian consultancy firms to expand their presence abroad.
India needs this vision to ensure that its talent, which is currently working for global firms and delivers value abroad, is fully utilised within the country. India needs to contain its reliance on multinational corporations for strategic audits and consulting for strengthening its economic sovereignty, thereby moving towards achieving the goal of Atmanirbhar Bharat. At the same time, India must focus on building global brands in areas such as Environmental, Social and Governance (ESG), audit, advisory, compliance, and multidisciplinary consultancy, including IT services, tapping into its vast export potential. In addition, it is equally important to strengthen institutions, raise professional standards, and foster a culture of innovation that supports long-term ecosystem development within the country.
Soooooo, we thought this was a public comment request asking for professionals to weigh in with their opinions on establishing their own multidisciplinary firms in India but it’s actually a questionnaire. That’s…interesting.
Will anything happen? If they get anywhere with this does this mean real Big 4 will have to compete with India’s “Big 4” for talent? We’ll see.
The Big 4 exploiting their talent is unacceptable and inhumane, especially when they are overworked and underpaid compared to local talents. I think they deserve to build their own empire, that can outlast the Big 4s.