New Delhi- In a move aimed at reshaping India’s professional services landscape, the government is preparing a set of legislative and policy reforms to help domestic audit firms compete with the global “Big Four” networks — Deloitte, PwC, EY, and KPMG.
The Ministry of Corporate Affairs (MCA) is in the final stages of consultations and is likely to introduce amendments through the Companies Act Amendment Bill, officials familiar with the matter said. The reform package is designed to build globally competitive Indian audit firms by addressing regulatory rigidity, improving tender access, and providing capital support.
Revisiting Structural Barriers in the Companies Act
One of the core proposals under consideration is to amend Section 141(1) of the Companies Act, which currently mandates that a majority of partners in an audit firm must be chartered accountants practicing in India.
While the clause was intended to maintain professional integrity, experts argue that it has inadvertently prevented multi-disciplinary partnerships (MDPs) — structures that allow firms to include professionals from law, IT, and consulting. These partnerships have been the cornerstone of the Big Four’s global dominance.
The government is also examining potential changes to Section 144, which governs conflict-of-interest provisions, to better align with evolving business models in audit and advisory services. Relaxing restrictions on non-audit services could help Indian firms diversify and scale integrated offerings.
Tender Reforms and Capital Support Measures
Beyond legislative changes, the government plans to reform tender norms that have traditionally favoured large international firms. Currently, high thresholds for turnover, employee strength, and global presence in government audits restrict participation by Indian players.
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Sources said the MCA is considering mandatory inclusion of domestic firms in large-value tenders and revising eligibility criteria to widen the bidder pool.
Policy discussions also include capital support mechanisms to help Indian firms invest in digital infrastructure, technology upgrades, and global branding — areas where capital intensity has kept them at a disadvantage.
“Policy interventions on tender reforms and capital support can accelerate capacity building in the sector. Domestic firms need both regulatory flexibility and financial backing to scale globally,” said a senior member of the Institute of Chartered Accountants of India (ICAI), requesting anonymity.
ICAI’s Role: Building Scale Through Collaboration
The ICAI has been tasked with aligning India’s regulatory framework with global best practices. As part of this, the institute is developing a digital merger platform to facilitate consolidation among Indian CA firms, enabling them to form larger entities capable of handling complex international audits.
The initiative will run parallel to the legislative amendments, with both expected to be rolled out over the next few months. Collectively, these reforms aim to build a stronger and more competitive professional services ecosystem in India.
Expert View: “A Defining Moment for Indian Audit Firms”
Cyber and financial crime expert described the proposed reforms as “a defining moment for India’s audit industry.”
“If implemented effectively, these changes could finally give Indian firms the structural and operational freedom they need to compete with global networks,” he said.
“This is not just about economic policy—it’s about empowering domestic expertise and reducing overdependence on foreign audit institutions.”
The Road Ahead
According to policy experts, these reforms could transform India’s audit and consulting industry over the next five to seven years.
By enabling multi-disciplinary partnerships, reforming tenders, and providing capital incentives, the government aims to create an equitable and competitive environment where Indian firms can expand both domestically and internationally.
Ultimately, this marks a strategic step toward professional self-reliance, aligning with India’s broader goal of strengthening its institutional and corporate governance architecture.
