The Prime Minister’s Office (PMO) has initiated a wide-ranging consultation to explore how Indian chartered accountant (CA) firms can scale up and compete with global giants. The consultation, routed through the Ministry of Corporate Affairs (MCA) and shared with the Institute of Chartered Accountants of India, seeks actionable recommendations to develop homegrown firms of international standing.
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Broad-Based Consultation on Firm Growth
According to sources familiar with the development, the PMO circulated a detailed note comprising over 30 discussion points. These span structural, regulatory, and strategic issues affecting the growth trajectory of Indian CA firms.
The consultation aims to identify bottlenecks and propose reforms that could enable domestic firms to expand their scale, improve service quality, and enhance global competitiveness. “It was a stakeholder consultation focused on specific issues related to the growth of Indian firms,” a source said.
Scrutiny of Big Four Influence
A key aspect of the consultation revolves around the dominance of global audit networks—Deloitte, PwC, EY, and KPMG—commonly referred to as the Big Four.
The PMO has reportedly sought views on whether foreign investors should be restricted from mandating the appointment of Big Four firms as auditors for Indian companies. This practice, often embedded in investment agreements, is seen by some stakeholders as limiting opportunities for domestic firms.
Additionally, the note examined the issue of “surrogacy arrangements,” where Indian firms operate in association with global networks, raising questions about independence, branding, and regulatory oversight.
Proposal to Restrict Foreign Branding
Another proposal under consideration is a potential ban on Indian audit firms using the branding or logos of foreign networks. The move is aimed at ensuring a clearer distinction between domestic firms and their international affiliations, while also encouraging the development of independent Indian brands.
Sources indicated that feedback was sought on whether such branding practices create an uneven playing field or hinder the emergence of strong indigenous firms.
Push for ‘National Champion’ CA Firms
At the core of the consultation is the idea of building “national champion” CA firms—large, well-capitalized Indian entities capable of competing globally. The PMO’s note reportedly explores ways to enable consolidation, capacity building, and regulatory support to help domestic firms scale operations.
The initiative reflects a broader policy push to reduce dependence on global networks and promote self-reliance in high-value professional services.
Data Localization and Security Concerns
The consultation also flagged concerns around data security, particularly the storage of sensitive Indian corporate data on foreign servers. The issue has been framed not just as a regulatory challenge but also as a matter of national interest.
Stakeholders were asked to examine whether stricter data localization norms are required for audit and financial information handled by firms with international linkages.
ICAI Submits Response
The Institute of Chartered Accountants of India submitted its response to the consultation in March, slightly beyond the initial one-month deadline. According to sources, the institute addressed around 20 of the issues it deemed most relevant.
While the details of ICAI’s recommendations are not publicly available, its input is expected to play a key role in shaping any future policy or regulatory framework.
Policy Implications Ahead
The PMO-led consultation signals a potential shift in India’s approach to regulating the audit and accounting sector. If translated into policy, the proposals could significantly alter the competitive landscape—impacting foreign audit networks, investor practices, and the growth prospects of domestic firms.
