Why Did ICAI Put Its Big 4 Disclosure Rules on Hold?

The Institute of Chartered Accountants of India (ICAI) has put on hold its much-anticipated Global Networking Guidelines, 2025, a regulatory framework that sought to bring greater transparency and accountability to the operations of multinational accounting networks in India. The decision has triggered a broader debate over whether the country’s regulatory approach aligns with the government’s stated objective of nurturing globally competitive Indian professional services firms.

The guidelines, which were notified in the Official Gazette on February 11, 2026, and scheduled to come into force on February 17, 2026, represented one of the most significant reforms in the regulation of international accounting networks in recent years. They were designed to require Indian firms affiliated with global audit and consulting networks to formally disclose the nature of their relationships with overseas entities and establish clearer compliance mechanisms.

Key Features of the Proposed Framework

The Global Networking Guidelines introduced several measures aimed at improving regulatory oversight without prohibiting international affiliations.

Among the major requirements were:

Mandatory registration of global networking arrangements with ICAI.
Disclosure of commercial arrangements, including royalty payments, technology licensing agreements, fee-sharing mechanisms, and other financial relationships between Indian firms and foreign affiliates.
Appointment of a designated nodal compliance officer who would be personally responsible for ensuring compliance with Indian regulatory requirements.
Greater transparency in transactions between Indian entities and their overseas network firms to ensure dealings occur on an arm’s-length basis.

Supporters of the framework argued that these measures would merely bring greater visibility into existing business structures rather than impose new operational restrictions.

Reform Backed by Judicial Developments

The guidelines followed significant legal developments, including a July 2024 judgment of the Delhi High Court, which affirmed ICAI’s authority to regulate Indian chartered accountant firms that are part of global accounting networks.

The proposed framework was viewed by many as ICAI’s response to evolving market structures in which international accounting brands operate through networks of affiliated Indian entities.

Parallel Liberalisation Through New Code of Ethics

The transparency measures were accompanied by another significant reform.

ICAI’s 13th Edition of the Code of Ethics, approved in December 2025 and made effective from April 1, 2026, relaxed long-standing restrictions on professional advertising by chartered accountant firms.

For the first time, Indian CA firms were permitted to promote their services through websites, LinkedIn, digital platforms, and other modern communication channels—departing from advertising restrictions that had largely remained unchanged since 2008.

Industry observers viewed the two reforms as complementary. While one sought greater disclosure from globally affiliated firms, the other expanded the ability of domestic firms to compete by modernising professional practice rules.

Implementation Deferred

Despite being formally notified, the implementation of the Global Networking Guidelines has now been deferred.

According to reports circulating within professional circles, the Ministry of Corporate Affairs (MCA), which administers ICAI, advised the institute to revisit the framework after receiving representations from stakeholders and requested that stakeholder concerns be addressed before the guidelines are brought into force.

ICAI has accordingly kept the guidelines in abeyance pending further consultations.

Debate Over India’s Professional Services Strategy

The postponement has reignited discussion over India’s broader strategy for developing globally competitive domestic accounting firms.

Prime Minister Narendra Modi has, on multiple occasions, emphasised the need to build an “Indian Big Four” capable of competing internationally, consistent with the broader vision of Atmanirbhar Bharat. At the same time, policymakers have examined issues relating to the role of multinational audit networks in strategically important sectors, including concerns surrounding data governance and the auditing of public interest entities.

Critics of the deferment argue that delaying the transparency framework risks preserving existing structures under which international accounting networks operate through affiliated Indian entities without comprehensive public disclosure of commercial arrangements.

Others contend that any regulatory changes affecting globally integrated professional services firms should follow extensive stakeholder consultation to ensure that compliance requirements remain practical and internationally competitive.

Transparency Versus Competitiveness

The controversy reflects a wider policy debate over balancing regulatory transparency with India’s ambition to strengthen its domestic professional services sector.

Proponents of the Global Networking Guidelines maintain that greater disclosure would create a more level playing field by ensuring consistent regulatory oversight across all firms, irrespective of their international affiliations. They argue that transparency enhances market confidence and supports fair competition.

Those favouring additional consultation caution that significant regulatory changes should be carefully calibrated to avoid unintended consequences for cross-border professional collaborations and investment.

As ICAI continues its review, the future of the Global Networking Guidelines is likely to remain closely watched by the accounting profession, regulators, multinational networks, and Indian firms aspiring to compete on the global stage. The outcome may ultimately shape the regulatory framework governing international accounting networks in India and influence the country’s long-term vision of developing internationally recognised indigenous professional services firms.