The Institute of Chartered Accountants of India is preparing to seek changes to the Chartered Accountants Act in a bid to create a regulatory framework that allows Indian accounting firms to scale up, collaborate more freely and compete with larger international professional services networks, according to people familiar with the matter.
The proposed overhaul comes at a time when India is pushing domestic firms across sectors to become more globally competitive, and professional services are increasingly seen as part of that ambition. For the accounting industry, the issue is not merely one of size. It is about building firms with the depth, governance and cross-disciplinary capability to serve multinational clients, complex transactions and fast-growing sectors such as automotive, electric vehicles and mobility, where audit, tax, compliance and advisory demands are becoming more sophisticated.
Regulatory Reset
The ICAI is expected to put forward amendments to the Act soon, with the objective of easing restrictions that have historically limited the formation of larger domestic partnerships and broader collaboration among practitioners. At the centre of the discussion are networking and practice guidelines, which the institute plans to revise so that firms can work together more effectively without running afoul of existing professional boundaries.
The move reflects a recognition that India's fragmented accounting market has made it difficult for homegrown firms to match the scale of global networks that dominate large audits and advisory mandates. While India has produced a large pool of qualified chartered accountants, the structure of the profession has often encouraged smaller practices rather than consolidated firms with national or international reach.
People aware of the discussions said the Prime Minister's Office has already examined the broader question of regulatory adjustments for domestic companies, signalling that the matter is being viewed as part of a wider competitiveness agenda rather than a narrow professional rule change. That policy backdrop could give momentum to ICAI's proposals, though any amendment would still require the usual legislative and regulatory process.
Bigger Firms, Broader Reach
The strategic logic is straightforward: larger firms can invest more in technology, specialist teams, quality control systems and sector expertise. They are also better positioned to serve clients in industries where compliance requirements are becoming more demanding and where transactions increasingly span manufacturing, software, supply chains and clean mobility.
For the automotive and EV ecosystem, this matters because the sector is moving through a period of rapid capital deployment, localisation, supply-chain restructuring and regulatory scrutiny. Companies in the space need advisers who can handle everything from indirect tax and transfer pricing to internal controls, ESG reporting and cross-border structuring. Smaller firms can and do provide such services, but the market increasingly rewards scale, consistency and multi-city delivery capability.
The ICAI's planned changes are also likely to reopen a long-running debate within the profession: how to preserve ethical standards and audit independence while allowing firms to consolidate and collaborate more freely. Supporters of reform argue that India cannot build globally competitive professional services firms if the rules continue to favour a highly dispersed market. Critics, however, may worry that rapid consolidation could create concentration risks or weaken the traditional identity of local practices.
Global Competition Test
The timing is significant. India is seeking to position itself as a hub for high-value services even as it courts investment in manufacturing, electric mobility and advanced technology. In that environment, the quality and scale of the domestic accounting profession can influence how confidently foreign investors and Indian corporates navigate regulation, reporting and expansion.
If the proposed amendments are adopted, they could mark one of the most consequential structural shifts in the profession in years. The likely outcome would not be an overnight transformation, but a gradual reorganisation of the market toward larger, more capable entities with wider geographic footprints and deeper specialisation.
For now, the key signal is political and institutional intent. ICAI is moving toward a framework that would make it easier for Indian firms to grow beyond their traditional limits, while policymakers appear open to regulatory changes that support domestic capability. The challenge will be to design reforms that expand scale without compromising professional independence, audit quality or public trust.
If successful, the changes could help India's accounting firms move from being primarily local service providers to becoming serious contenders in the global professional services landscape.