NITI Aayog released a comprehensive report on August 10, 2026, examining the regulatory framework governing India\u2019s professional services sector. Titled \u201cIndia\u2019s Services Sector: Insights on Regulatory Regime in Professional Services,\u201d the report is the third under the think tank\u2019s Services Thematic Series and benchmarks India\u2019s regulations against select foreign jurisdictions. Launched by Vice Chairman Ashok Kumar Lahiri at a High-Powered \u201cEducation to Employment and Enterprise\u201d Standing Committee meeting, the report flags uneven regulation across professions and proposes a four-pronged strategy to unlock the sector\u2019s full potential.
What Are Professional Services?
Professional services are high-value, knowledge-intensive activities that form the backbone of India\u2019s services economy. The report identifies five core sub-sectors: law, accounting and auditing, architecture, engineering, and healthcare. Unlike routine commercial services, professional services demand specialised qualifications, ethical standards, and regulatory oversight to protect public interest.
These services do not operate in isolation. They support manufacturing, construction, agriculture, and other service industries, making them a critical part of the wider value chain. A chartered accountant auditing a factory, an architect designing a smart city project, or an engineer supervising a dam construction are all part of this ecosystem. The regulatory frameworks governing them, however, vary enormously from one profession to the next.
India’s Growing Footprint in Global Services
India\u2019s services sector contributed 55% of the country\u2019s GDP in financial year 2024, according to the Economic Survey 2023-24. The country emerged as the seventh-largest services exporter globally in 2024, holding a 4.3% share of world services exports, up from just 2% in 2005.
Within this, professional and management consulting services accounted for nearly 20% of India\u2019s total services exports in FY 2024-25. RBI data cited in the report shows the professional services segment grew at an 18% compound annual growth rate (CAGR) between FY 2015 and FY 2025. India\u2019s revealed comparative advantage in professional and management consulting services rose from 0.95 in 2005 to 3.0 in 2024, signalling a dramatic improvement in the country\u2019s global positioning.
The Regulatory Problem
The report\u2019s central finding is that India lacks a uniform regulatory regime for professional services. Professions like medicine, law, accounting, and auditing operate under detailed legal and institutional frameworks. Others, including engineering, landscape architecture, and urban planning, are lightly regulated or lack formal professional oversight altogether.
NITI Aayog used the OECD Services Trade Restrictiveness Index as one international benchmark. India scored a high 0.865 for legal services, 0.762 for accounting, and 0.537 for architecture. Engineering, by contrast, scored only 0.155, reflecting a comparatively open market. These scores, however, cover only four of the many professional disciplines in India, leaving a broader regulatory picture only partially visible.
Sector-Specific Gaps Identified by the Report
Legal Services
The Advocates Act, 1961 recognises only a single category of practitioners, that is, advocates. This leaves a regulatory gap around in-house counsel, legal process outsourcing professionals, and legal consultants. Advocates can practise as sole proprietorships, partnerships, or limited liability partnerships (LLPs), but private limited law firms and multidisciplinary practices remain prohibited.
Rule 36 of the Bar Council of India Rules prohibits advocates from advertising or soliciting work, even indirectly. While the rules were relaxed in 2008 to permit basic professional websites, NITI Aayog says a more contemporary approach could allow lawyers to use digital platforms responsibly while maintaining ethical standards.
Accounting and Auditing
Exports of accounting, auditing, and bookkeeping services rose from $617 million in FY 2014-15 to $3.32 billion in FY 2024-25, according to RBI data. India\u2019s regulatory regime remains relatively restrictive for foreign accountants, who generally need ICAI (Institute of Chartered Accountants of India) registration or must work through affiliations with Indian chartered accountancy firms. The report proposes expanding mutual recognition agreements with international accounting bodies.
Engineering
Engineering services exports grew from $1.77 billion in FY 2014-15 to $13.77 billion in FY 2024-25, a CAGR of 22.8%. India permits 100% FDI in engineering services. However, there is no central statutory framework for engineers involved in construction and related activities. The report suggests such a framework could set minimum standards, establish a code of ethics, and introduce accountability mechanisms, especially for public safety-related work.
Healthcare
Healthcare faces challenges around interstate mobility of practitioners and incomplete implementation of the National Commission for Allied and Healthcare Professions Act, 2021. As of 2025, only 26 states and Union Territories had constituted the required State Allied and Healthcare Councils, with some deviations from the Act. The report also notes that the National Exit Test (NExT), mandated to standardise competency assessment for medical graduates, has not yet been introduced.
The Four-Pronged Strategy
NITI Aayog proposes four interconnected pillars to strengthen the professional services ecosystem:
Continuous Professional Development: The report calls for a structured continuing professional development (CPD) framework. India currently lacks an enforceable CPD-hour regime across professions, leading to uneven competency standards. A well-structured framework would help professionals keep pace with changing technologies, evolving standards, and global market requirements, while also elevating service quality and building public trust.
Elevating Professional Services in the Value Chain: Professional services support businesses across manufacturing, construction, and agriculture. The report emphasises moving beyond back-end execution to high-value decision-making. This means Indian firms should transition from being process outsourcers to being strategic advisors and knowledge partners in the global services value chain.
Adopting Global Best Practices: The report calls for greater regulatory clarity, strengthened professional standards, and facilitated recognition of qualifications. Mutual recognition agreements (MRAs) with international counterparts would enable Indian professionals to practise abroad and bring global talent into the Indian market on reciprocal terms. India is already a member of the Washington Accord through the National Board of Accreditation (full signatory since 2014), though it is not yet a member of the Sydney or Dublin Accords for engineering technician qualifications.
Advancing Emerging Trends: The report highlights the transformative potential of artificial intelligence (AI), environmental, social, and governance (ESG) services, and blockchain-based smart contracts. These technologies are already reshaping law, accounting, and consulting. NITI Aayog sees an opportunity for India to develop proprietary tools in financial modelling, legal analytics, and consulting, moving from cost-driven delivery to innovation-led professional services.
Why It Matters
The report arrives at a critical moment. India is approaching its demographic peak, with millions of young professionals entering the workforce each year. The professional services sector can provide high-skilled employment, drive entrepreneurship, and generate remittance inflows, but only if regulatory barriers are addressed.
A well-designed regulatory framework would also help expand services exports, facilitate the cross-border mobility of professionals, and improve India\u2019s ease of doing business. The Union Budget 2026-27 announced the constitution of a High-Powered \u201cEducation to Employment and Enterprise\u201d Standing Committee to recommend measures positioning the services sector as a core driver of Viksit Bharat @2047, the government\u2019s vision for India to become a developed nation by 2047.
Currently, the WTO\u2019s Joint Initiative on Services Domestic Regulation disciplines had entered into force for 56 WTO members as of August 2026, with 72 economies committed to implementing them. India is not a signatory, although the disciplines apply on a most-favoured-nation basis. The report suggests this could become a barrier if not addressed, particularly as Indian professionals seek greater global mobility and market access.
Key Takeaways
- The report is the third under NITI Aayog\u2019s Services Thematic Series and was launched by Vice Chairman Ashok Kumar Lahiri on August 10, 2026.
- Professional services account for nearly 25% of India\u2019s total services exports, with professional and management consulting contributing 20% of total services exports in FY 2024-25.
- India was the seventh-largest global services exporter in 2024 with a 4.3% share, up from 2% in 2005.
- The report identifies five core professional services: law, accounting and auditing, architecture, engineering, and healthcare.
- India scores 0.865 on the OECD Services Trade Restrictiveness Index for legal services, the highest among the professions assessed.
- The four-pronged strategy includes continuous professional development, elevating professional services in the value chain, adopting global best practices, and advancing emerging trends such as AI and ESG services.
- The National Commission for Allied and Healthcare Professions Act, 2021 has been only partially implemented, with just 26 states and UTs constituting required State Allied and Healthcare Councils as of 2025.
