Is India the Right Growth Market for Global Consultancies?

Are All of the Largest Consultancies Right That India Is a Growth Market for Them?

If India’s economic growth story continues apace and global management consultancies continue investing in India-based talent to serve India-based clients, what strategic distinctions between the firms can we expect and what are the firms’ prospects of making India a top-tier market for consulting services? In short, if India is on track to become the third largest economy, will it also be the third largest revenue source for the Big Four, Accenture, IBM and Capgemini, or only for the firms that act first and implement the optimal strategies?

 

First, here is a quick review of recent India-centric announcements and developments, and TBR’s analysis of the Big Four firms and some of the management consulting peers:

 

• While Accenture largely relies on India as the company’s largest offshore delivery hub, the company is also investing for future locally sourced growth, as evidenced by the announced opening of a generative AI (GenAI) studio in the country. Additionally, deal wins, such as with Union Bank of India to design and develop a data lake platform supporting the bank’s data strategy architecture and analytics-enabled reporting capabilities, will arm Accenture with strong use cases as it elevates its GenAI value proposition. Accenture also announced plans to open GenAI studios in China, Japan and Australia, highlighting the company’s culture and willingness to take on risk, which both remain consistent regardless of clients’ subdued discretionary spend.
• Deloitte continues to diversify its regional opportunities in an effort to build a beachhead in emerging markets including India. Deloitte India released the Digital Public Infrastructure playbook for nations, which we believe will help it drive tech-enabled strategy discussions with India-based state governments as well as other countries in the APAC region as they embark on citizen-centered digital programs.
• IBM is expanding its innovation and research capabilities in India to strengthen relationships with clients and startups and support digital transformation in the country. In November IBM opened a new IBM Consulting Client Innovation Center (CIC) in Gandhinagar, India. IBM is expanding in emerging Tier 3 cities across India to benefit from access to talent, such as graduate hires, and strengthen its ecosystem. IBM Consulting’s CIC will emphasize expanding asset-led IT services activities around GenAI, hybrid cloud and cybersecurity. IBM Consulting will use security engineering professionals to build cybersecurity platforms and accelerators to automate threat management and improve regulatory compliance.
• TBR continues to believe KPMG sees India as both a global delivery hub and a market that can help the firm bolster its overall performance over the next decade. We recognize that KPMG is far from reaching its optimal staffing pyramid to support both sets of opportunities, but recent investments suggest the firm is taking the necessary steps to fill the gaps. For example, KPMG announced the expansion of its global delivery center in Kolkata, India. KPMG India also partnered with Lineaje Inc. to jointly pursue supply chain security management opportunities with local clients seeking support for third-party risk management programs.
• In February Capgemini’s chief technology and innovation officer in India, Nisheeth Srivastava, shared that the company is gearing up for a hiring spree in India for FY25 (ending March 31, 2025) due to an expected surge in domestic business. The ramp-up in hiring aligns with positive industry trends following a challenging FY24 within the IT sector. Srivastava stressed the importance of upskilling in areas such as data, machine learning and AI because of the disparity between industry hiring needs and technical education in India. Srivastava also highlighted the potential for GenAI to expand the workforce through coding-based learning opportunities. Demand for skills such as user experience and interface, data science and cybersecurity is expected to rise in India as vendors increase hiring to meet the market’s need for an evolving skill set within the country.
• In TBR’s view, EY’s India strategy appears to include amplifying the firm’s India-centric thought leadership through nongovernmental organizations and/or industry groups, such as the Organisation of Pharmaceutical Producers of India. Not surprisingly, much of EY India’s thought leadership has focused on GenAI, with a highlight on the private equity, healthcare and global capability centers sectors.
• TBR discussed PwC India’s recent analyst event in Gurgaon in a special report, PwC touts India as strategic growth hub, investing in the country’s tech and talent for long-term gains. According to the firm, PwC has seen 30% year-to-year revenue growth in India, driven by India-based clients across a wide spectrum of services. India-based clients look to PwC for integrated solutions in a variety of areas, including supply chain management, human capital management and operations consulting. In addition, clients in the country have matured since 2019 and are more adept at evaluating and buying consulting services.

Strengthening physical presence across India remains a core piece of the consultancies’ strategies to position closely with clients. Through their various collaboration centers, the consultancies bring GenAI expertise, enhanced delivery, increased innovation efforts and expanded portfolio offerings to local clients and partners. Planting themselves in front of clients will validate or negate the consultancies’ strategies of how to effectively connect with and generate new revenues across the region.
 

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If the Largest Consultancies Follow the Same Basic Industry Strategy in India, Will They Aall Succeed?

PwC India has focused on five industries — financial services, healthcare and pharma, manufacturing, infrastructure, and retail — which, not coincidentally, are the same industries the Indian government has determined to be strategic for the country’s sustained growth. Looking over the recent developments, the rest of the Big Four, along with Accenture, IBM and Capgemini, are pursuing similar strategies, with all of them potentially over-indexing on a handful of industries and markets.

 

Discussions during the PwC India event led TBR to ponder the questions posed earlier in this report. In addition, we wonder if price pressures; compelled cooperation among consultancies, IT services companies and technology vendors; and consolidation within these select industries lead consultancies to develop highly specialized talent who become the undisputed go-to for that particular domain or industry? Will PwC or any peers focus on subverticals and carve out a niche? Or will these consultancies cast as wide a net as possible for opportunities in these select industries, creating opportunity for talent mobility (the nice way of saying “poaching”), salary spikes and subsequent margin pressures? This is, admittedly, only one element of these consultancies’ strategies, but given the similarities across GenAI hubs and innovation centers and upskilling local talent, this could be an avenue for one or two of these competitors to separate from the pack.

 

One final caution or caveat: Transforming India from low-cost delivery factory to a high-value engineering hub is appealing — to the Indian government, to the talent hired into these jobs and to the firms charging Indian companies for higher-value services. But the short-to mid-term outlook will remain aspirational for a bevy of reasons related to India’s systemic and persistent economic challenges. In TBR’s view, as much as global firms continue to pour resources into India to serve the local market, the predominant investment motivation will likely remain the labor arbitrage, lower-cost advantage India continues to provide. For a deeper look on this, see the recent TBR special report, HCLT leads revenue growth among India-centric IT services vendors amid market uncertainties.