India has relaxed its rules for consultancy firms seeking government contracts, reducing some of the barriers that have traditionally favored large, established consulting companies. The changes are intended to give more Indian consultancy firms an opportunity to compete for public-sector projects by placing greater emphasis on the quality of a firm’s proposed methodology and less on its size, turnover and previous experience with large projects.
Under the revised approach, methodology can account for up to 50% of the evaluation score, while the weight given to a consultancy firm’s previous experience is capped at 10%. The changes could widen competition in India’s government consultancy market, which is expected to nearly double by 2031, while creating more opportunities for smaller and mid-sized domestic firms.
Government Changes Consultancy Evaluation Rules
The revised framework changes how government agencies can evaluate consultancy proposals. Instead of relying heavily on a firm’s past project credentials and financial scale, the new approach gives greater importance to the quality of the proposed solution.
The key changes include:
- Methodology receiving up to 50% of the evaluation score.
- Previous consultancy experience being capped at 10%.
- Reduced emphasis on very high turnover requirements.
- Greater consideration of the firm’s financial health and overall capability.
- More opportunities for domestic firms to compete with multinational consultancies.
The changes are particularly significant for smaller firms that may have strong technical teams and innovative approaches but lack the extensive project portfolios typically associated with large consulting companies.
Key Changes
| Evaluation Area | New Approach |
|---|---|
| Methodology | Up to 50% |
| Firm’s Relevant Experience | Capped at 10% |
| Financial Health | Greater emphasis |
| Past Mega-Projects | Reduced importance |
| Competition | More scope for Indian firms |
Why Methodology Matters More
The increased weighting for methodology reflects the nature of consultancy work, where the quality of the proposed approach can be more important than the sheer number of projects a company has completed.
India’s Manual for Procurement of Consultancy Services, Second Edition, 2025, for example, already recommends giving methodology a weight of between 20% and 50%, while consultancy-firm experience is generally assigned only 5% to 10%. The government manual says greater weight can be given to methodology for complex assignments such as multidisciplinary feasibility studies and management studies.
The revised approach therefore puts greater emphasis on factors such as:
- Understanding of the government’s requirements.
- Proposed methodology.
- Work plan.
- Innovation.
- Technical approach.
- Ability to deliver the assignment effectively.
This can help shift procurement away from simply selecting companies with the longest track record toward evaluating how effectively bidders can address the specific problem presented by a government agency.
Smaller Indian Consultancies Could Benefit
High eligibility thresholds have historically made it difficult for smaller consultancy firms to qualify for some government tenders.
Large contracts can require bidders to demonstrate:
- High annual turnover.
- Large employee bases.
- Extensive government experience.
- Previous completion of projects of significant value.
- A long list of comparable assignments.
Such requirements can automatically exclude newer firms even when they have capable professionals and specialized expertise.
The relaxed approach could allow more domestic companies to participate, particularly firms specializing in areas such as technology, digital transformation, infrastructure, sustainability, public policy and management consulting.
Competition With Global Consulting Firms
The policy change could also increase competition between Indian consultancies and global consulting companies such as Deloitte and KPMG.
Large multinational consulting firms have significant advantages in terms of global experience, large workforces and extensive portfolios. The new evaluation structure could reduce the advantage created by those credentials when a smaller Indian firm presents a stronger methodology for a particular assignment.
This does not mean large firms will be excluded from government contracts. Instead, the changes are intended to ensure that past scale and project history do not disproportionately determine the outcome of a tender.
Potential Impact on Different Firms
| Firm Type | Potential Impact |
|---|---|
| Small Indian Consultancies | Easier access to eligible tenders |
| Mid-Sized Firms | Greater opportunity to compete |
| Large Indian Firms | More competition from specialized firms |
| Global Consultancies | Reduced advantage from scale and past experience |
| Government Agencies | Wider pool of potential bidders |
Government Procurement Could Become More Competitive
Increasing competition among consultancy firms could have broader implications for government procurement.
A larger pool of bidders can potentially provide government agencies with:
- More innovative proposals.
- Greater specialization.
- Competitive pricing.
- New technology solutions.
- Wider access to domestic expertise.
However, lower entry barriers also make the quality of evaluation more important. Government agencies will need to ensure that methodology-based scoring remains objective and transparent so that firms are assessed consistently.
The government’s procurement manual notes that consultancy proposals are intellectual products and that evaluation involves professional judgment. It also recommends predefined criteria and safeguards against unreasonable or arbitrary evaluation.
A Growing Consultancy Market
The policy change comes as demand for consulting services continues to expand alongside India’s economic and digital transformation.
Government agencies increasingly require specialist expertise for projects involving:
- Digital infrastructure.
- Artificial intelligence.
- Urban development.
- Transportation.
- Energy transition.
- Public-sector modernization.
- Manufacturing.
- Healthcare.
- Climate and sustainability.
As these projects become more complex, governments may need access to a wider range of specialized consulting capabilities rather than relying primarily on the largest firms.
Opportunities for Specialized Firms
One of the biggest potential beneficiaries could be specialized consultancies with expertise in emerging technologies.
For example, a relatively young company specializing in AI implementation may not have the decades-long government project record of a multinational consultancy. However, it could potentially offer a more technically relevant solution for an AI-focused government project.
The new approach could therefore encourage companies to compete through:
- Technical expertise.
- Innovation.
- Specialized talent.
- Strong project methodologies.
- Understanding of local requirements.
This could also encourage more entrepreneurship in India’s professional-services sector.
Challenges Remain
Relaxing eligibility requirements does not automatically guarantee that smaller firms will win government contracts.
Government agencies must still assess whether a bidder has the financial stability, professional capability and resources required to complete a project.
There is also a risk that overly subjective methodology scoring could create uncertainty for bidders. Clear evaluation criteria, transparent scoring and effective oversight will therefore remain important.
The government procurement manual recommends using defined criteria and keeping sub-criteria to the minimum necessary to reduce unnecessary complexity and subjectivity.
Looking Ahead
India’s decision to ease consultancy procurement rules could significantly broaden the pool of companies competing for government contracts. By allowing methodology to account for as much as 50% of the evaluation and limiting the weight of prior firm experience to 10%, the government is placing greater emphasis on the quality and relevance of proposed solutions rather than simply the scale of a consultancy’s past operations.
Looking ahead, the success of the reforms will depend on implementation. If government agencies apply the new framework transparently, smaller Indian consultancies could gain meaningful access to public-sector opportunities, encouraging innovation and increasing competition with established global firms. The changes could ultimately help create a more diverse domestic consultancy ecosystem while giving government departments access to a broader range of specialized expertise as India’s public infrastructure and technology requirements expand.
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