Local CA firms set for global tie-ups

The Institute of Chartered Accountants of India (ICAI) has approved a crucial draft regulatory framework which will enable domestic chartered accountant firms to tie up with their global peers to set up shop in the country, said its president Charanjot Singh Nanda.

The move is aimed at enabling local entities to gain scale, in sync with the Modi government's vision of creating large home-grown accounting firms, Nanda told ET.

The framework would require local firms that are already affiliated with global accounting entities to register with the ICAI and undertake necessary compliances, said people aware of the details.

The institute held talks with the corporate affairs ministry before finalising the draft, approved by its apex council on Tuesday, Nanda indicated. The draft will soon be put out for stakeholder comments and notified by early July, he said.

Currently, there is no formal framework governing such global tie-ups. Those with foreign tie-ups were earlier required to submit certain details with the ICAI by submitting a form, which was discontinued four years ago, as a formal framework on this was sought to be introduced.

At present, the Big Four—EY, Deloitte, KPMG, PwC—along with Grant Thornton and BDO dominate the Indian audit ecosystem, with their affiliates having handled assignments of 326 of the 486 Nifty-500 companies as of March 2025, according to a primeinfobase.com report.


Contours of the draft framework
As per the draft framework, an accountancy firm formed through a tie-up with an overseas entity has to register with the ICAI and designate a senior member or partner as a nodal officer for ensuring various compliances, said the people cited earlier.

Such firms will have to submit their names, registration details and changes in constitution with the ICAI. They will also have to file their annual returns with the institute.

Domestic entities that would be part of the firms formed with overseas networks will have to abide by the stipulated ethical standards.

“The operations of overseas networks in India will have to comply with all these regulations,” said one of the persons, who did not wish to be identified.

Already, to build scale through merger of local CA firms, the ICAI last year made two key changes to its guidelines.

Accounting firms wishing to merge were allowed up to 10 years, instead of the earlier five, to separate if things didn’t go according to plan. Similarly, no fees would be charged for freezing the names along with the corresponding firm registration number.

In 2017, Prime Minister Narendra Modi had called on chartered accountants to create at least four large domestic firms.

Last year, finance and corporate affairs minister Nirmala Sitharaman, too, had called for the creation of large Indian auditing firms.