Rapid growth forecast for Indian tax consulting market
According to new research, the Indian tax consulting market grew 9% over the last year to hit revenues of approximately $6.5 billion (Rs. 42,500 crore). The growth is expected to add another 9% till 2018 to reach a value of around $7.1 billion (Rs. 46,500 crore), supported by the increase in demand for tax advice following the introduction of GST earlier this year.
One of the most lucrative segments of the professional consulting services industry is the practice of tax consulting. The segment includes tax advisory practices, book-keeping, and some types of accounting and auditing activities. Such functions remain steadily relevant due to the dynamic nature of tax rules and regulations. Both domestically and internationally, shifting policies bring about shifts in tax requirements, and companies require all the help that they can get in order to ensure that they meet such requirements.
Analysis conducted by Consultancy.in of recent data released by Statista revealed that the Indian tax consulting market is due to record 9% growth over the next year, projected to cross the $7 billion mark by 2018. This comes after a 9% jump since last year from approximately $6 billion to $6.5 billion, which was primarily driven by the aggressive expansion strategies of the Big Four firms in the country.
The Big Four, made up of PwC, Deloitte, EY and KPMG are the largest players in the global consulting industry, with the same being the case in India. Deloitte, for example, currently has about 75 partners in its Indian tax and advisory segment, 20 of who joined from KPMG in recent months. The addition of partners came as a part of Deloitte’s efforts to compete with EY’s tax advisory vertical in India, which currently operates with approximately 125 partners. KPMG, meanwhile, operates with 250 partners in its advisory practice, with plans to add another 15-20 in months to come. The last member of the Big Four, PwC, also has a relatively strong operation with 113 partners and plans for substantial growth in the near future.
Other major professional services firms that are active in India’s tax advisory space include BDO, Grant Thorton, and RSM. Among the largest Indian firms in the segment are BMR Advisors, Dhruva Advisors, and Nangia & Company. While these firms are significantly boosting their revenues in India, future growth will further be aided by the advent of the Goods and Services Tax (GST) regime in the country. According to tax professionals in India, around 9 million companies are expected to come under the jurisdiction of the GST’s regulations. Accounting for a conservative estimate of 5 tax consultants aiding large companies, and 1 consultant aiding mid-sized firms with GST regulations, an estimated 1.3 million new tax consultants will be required under the new regime. These numbers are likely to further drive the already high growth anticipated for the next year.
Previous analysis from Consultancy.in demonstrated that the Indian business and management consulting market is forecast for 6% growth over the next year, coming on the back of 6% growth since last year as well. The market is estimated to reach a value of $12.348 billion by the next year.
