Local Chartered Account (CA) firms set for global tie-ups

The Institute of Chartered Accountants of India (ICAI) has approved a significant draft regulatory framework to allow domestic chartered accountant (CA) firms to collaborate with their global counterparts and establish operations in India, said ICAI President Mr. Charanjot Singh Nanda. This initiative aligns with the Prime Minister Mr. Narendra Modi government’s vision of developing large, home-grown accounting firms by enabling local entities to scale up. The draft framework mandates that domestic firms affiliated with international accounting entities must register with the ICAI and comply with relevant regulations. The ICAI consulted the Ministry of Corporate Affairs before finalising the draft, which was approved by its apex council on May 27, 2025, and will be released for stakeholder feedback, with official notification expected by early July.
Currently, no formal regulatory framework governs such global tie-ups, and the previous requirement for firms with foreign affiliations to submit details to the ICAI was discontinued four years ago. The Big Four accounting firms—Ernst & Young (EY), Deloitte, KPMG, and PricewaterhouseCoopers (PwC)—alongside Grant Thornton and BDO, dominate the Indian audit market, handling assignments for 326 of the 486 Nifty-500 companies as of March 2025. The draft framework requires overseas-affiliated firms to register with the ICAI, appoint a senior partner as a nodal officer, and comply with ethical standards and annual filing requirements. Earlier, to facilitate growth through mergers, the ICAI extended the separation period from five to ten years and waived fees for freezing firm names. This regulatory push follows calls from Prime Minister Mr. Narendra Modi in 2017 and Union Minister for Finance and Corporate Affairs Ms. Nirmala Sitharaman in 2024 for the creation of large Indian auditing firms.

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