Desi multidisciplinary partnership firms
Indians have excelled in diverse sectors across the globe. While individuals have thrived in their own right, what is striking is that we do not have any renowned global consulting companies, or even accounting and auditing firms of the likes of PwC, KPMG, Ernst & Young or Deloitte. We do not have global firms, let alone large pure consulting companies operating in the country. As a result, most of the mega consulting contracts – be they in infrastructure, ports, disinvestment or strategic consulting for state governments – are bagged by global companies.
Way back in 2017, PM Modi remarked that India should have top four accounting and auditing firms to make up the world’s eight. Indeed, the reason Indian firms cannot gatecrash into the top tier globally is largely due to the restrictive regulatory practices being followed. As a result, Indian CAs, lawyers, and consultants have been forced to operate in silos instead of working under one roof to offer integrated solutions.
The PMO is seized of the matter, and a meeting to relax regulatory hurdles is likely to be held shortly. Meanwhile, the Ministry of Corporate Affairs has mooted the establishment of Indian Multi-Disciplinary Partnership Firms (MDPF). The rationale is that with India having inked several FTAs with other countries, these firms can expand their presence overseas.
A background note advocating MDPFs has also been prepared to seek comments from the public and all stakeholders. These firms can offer a diverse range of services, including auditing, tax and legal, consulting advisory, and specialised areas like ESG, forensics, and technology. Just as a project owner is comfortable having a single point of contact with EPC firms, a multidisciplinary firm will allow it to act as a one-stop solution provider, addressing client requirements with coordinated expertise and combining global reach with local knowledge.
India already has the talent, which can be seen in leading CAs working in the Big Four firms operating in the country. Very few, like Jamil Khatri, founder of Uniqus, have taken the plunge and started their own tech-enabled consulting firms. India needs to reduce its reliance on multinational corporations for strategic audits and consulting and move towards achieving the goal of Atmanirbhar Bharat. There are very few firms with expertise in Environmental, Social, and Governance (ESG) audit, which is still a relatively new area globally. The MCA states 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.
Most of the Big Four have grown through operating global networks, which ensure scale and consistency across countries. These networks mobilise large pools of expertise and resources in the countries where they operate, while consistency is maintained through uniform methodologies, shared technology platforms, and global best practices. This structure allows international firms to deliver seamless, reliable, and comparable services worldwide, making them trusted partners for global businesses and governments.
The international firms operate through partnership structures where senior professionals are partners who own and manage the firm. This model creates strong accountability, as partners are directly responsible for the quality of work and client relationships, while also sharing the risks and rewards of the business.
Embracing technology has allowed them to build proprietary platforms and alliances through which they can offer advanced IT solutions to their clients. Investments are made in leadership academies, certifications and mobility programmes to grow talent and nurture leaders.
It is true that the RBI and other regulatory bodies have taken steps to allow Indian audit firms to grow. The MCA has also advocated a review of the Companies Act, which restricts the number of partners who can operate in a firm.
One issue highlighted in the note relates to the assessment of technical know-how. Sometimes, technical qualifications are evaluated at the firm level rather than the individual level, favouring global companies. Since expertise ultimately lies with individuals, their past credentials should count even when they move to Indian firms; otherwise, domestic firms remain structurally disadvantaged in competing for large projects against foreign players.
One of the biggest challenges in creating a world-class organisation is the huge initial capital required, besides investment in time and patience to grow the firms. Will professionals, ensconced in high-paying jobs in the Big Four, leave to risk creating a new firm? Or will it require PE investors and others from various fields to set up such firms? The evolution of MDPFs into global entities may well take decades. But the brave ones who chalk out a new path can truly benefit.