In a bid to scale up India’s chartered accountancy ecosystem, the Institute of Chartered Accountants of India (ICAI) has approved a draft regulatory framework that allows domestic CA firms to formally tie up with international accounting entities. ICAI president Charanjot Singh Nanda confirmed that the move aligns with the central government’s vision of building large, home-grown accounting giants capable of competing on the global stage.
The draft framework, which received the ICAI’s apex council approval on Tuesday, will soon be released for stakeholder comments, with final notification expected by early July 2025. The framework follows consultations with the Ministry of Corporate Affairs, ensuring policy-level backing for what could become a transformative reform in India’s audit and financial reporting landscape.
Until now, India lacked a formal structure for global CA firm collaborations. While some Indian firms were affiliated with international networks, there was only a basic form-based disclosure process—discontinued four years ago. The new framework is set to institutionalize and regulate these relationships.
Compliance, Governance, and Ethical Standards at the Core of the New Rules
As per the draft provisions, any accountancy firm entering into a tie-up with a foreign entity will be required to register with the ICAI. They must designate a senior partner or member as a nodal officer, who will be responsible for ensuring regulatory compliance.
Firms will need to:
- Submit their names and registration details
- Disclose any changes in constitution or structure
- File annual returns with ICAI
Importantly, these partnerships must uphold ICAI’s ethical standards. Domestic entities involved in global tie-ups are expected to fully comply with Indian regulations, ensuring no dilution of oversight due to foreign affiliations. According to people familiar with the framework, foreign networks operating in India will also be brought under this regulatory umbrella, eliminating potential gray areas that currently exist in cross-border collaborations.
The draft also aims to create accountability within the Indian market while offering local firms the chance to build scale, acquire global expertise, and expand service offerings without compromising governance.
ALSO READ: FCRF Launches Campus Ambassador Program to Empower India’s Next-Gen Cyber Defenders
Building Scale: A Push for Large Indian Firms Amid Big Four Dominance
The move comes at a time when India’s audit market is heavily dominated by foreign-affiliated entities, particularly the Big Four—EY, Deloitte, KPMG, and PwC, alongside Grant Thornton and BDO. According to a report by primeinfobase.com, firms affiliated with these global players audited 326 of the 486 Nifty-500 companies as of March 2025.
To counterbalance this dominance, the ICAI has made conscious efforts to encourage consolidation and growth of domestic firms. In 2023, the institute introduced major reforms to its merger guidelines, extending the separation window from 5 to 10 years and waiving fees for freezing names and firm registration numbers—moves that make mergers and collaborations more feasible and less risky.
The initiative echoes Prime Minister Narendra Modi’s 2017 call for Indian CAs to create at least four globally competitive accounting firms. In 2023, Finance Minister Nirmala Sitharaman reinforced the sentiment, urging the ICAI to foster large Indian firms capable of standing shoulder to shoulder with global players.
This new framework could serve as the regulatory foundation that enables such ambitions, offering a structured, transparent pathway for partnerships that bring global best practices to Indian soil—while retaining local accountability.
A Bold Step Toward Global Integration and Domestic Empowerment
The ICAI’s draft framework marks a watershed moment for the Indian chartered accountancy profession. By formalizing foreign tie-ups, ensuring stringent oversight, and encouraging ethical compliance, the initiative seeks to empower Indian CA firms to rise to global standards without losing regulatory integrity.
If implemented effectively, this framework could reshape India’s audit landscape, reduce over-reliance on the Big Four, and help Indian firms become global contenders in accounting, assurance, and advisory services.