India’s Finance Ministry has introduced new guidelines aimed at increasing competition in consultancy procurement, giving emerging Indian firms a fighting chance against dominant multinational giants like Ernst & Young, PwC, Deloitte and KPMG.
India’s Finance Ministry has moved to loosen tender rules for consultancy work after a review found that central government procurement practices on GeM often favoured the largest firms. In an office memorandum dated July 22, the Department of Expenditure told ministries and departments not to rely on unusually high turnover thresholds, excessive emphasis on a firm’s past work, or minimum payroll staff levels that go beyond what a contract actually requires. The department said those practices can curb competition and shut out capable bidders.
The change matters because consulting contracts awarded by the central government have long been dominated by multinational firms, especially the Big Four: Ernst & Young, PwC, Deloitte and KPMG. The Indian Express reported in January 2024 that 44 central departments had hired 1,499 consultants from external agencies, spending Rs 302 crore a year. Industry advisers say the new guidance could give Indian consultancies a better chance to compete on merit rather than scale alone.
Suraj Nangia, founder and head of government and public sector advisory at Nangia Global, told The Indian Express that the memorandum is a significant pro-competition step and could reshape how the government buys advisory services. He said tender conditions had often been written in ways that effectively ruled out smaller firms, even when those filters were not relevant to the assignment. He argued that linking staff requirements to the real manpower needed for a project and putting more weight on relevant experience would allow more specialist Indian firms to bid.
The department also told procuring entities to follow the consultancy procurement manual more closely, including rules on shortlisting, technical scoring and evaluation. That manual allows officials to assess bidders on past experience, financial capability, the quality of the proposed methodology, the credentials of key staff and the ability to transfer knowledge. It also gives procuring entities room to waive minor deviations where they do not materially affect a consultant’s ability to deliver the contract.
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