The Indian government is considering major reforms in the accounting and audit sector as it aims to create domestic firms capable of competing with the Big Four—EY, Deloitte, KPMG, and PwC.
According to the Institute of Chartered Accountants of India (ICAI), fewer than 1% of registered accounting firms have more than 10 partners, with only 13 firms exceeding 50 partners.
Despite these small numbers, 459 firms employ about 15% of the workforce of 183,642, including partners and paid assistants, while the top 13 firms account for 7% of total employees.
The dominance of global players in the industry has highlighted the need for large domestic firms capable of meeting the demands of India’s growing business and consultancy market.
A panel led by corporate affairs secretary Deepti Gaur Mukerjee is reviewing regulatory hurdles preventing Indian audit and consultancy firms from expanding. “Necessary regulatory changes could be finalised this fiscal itself,” a source said, as quoted by ET.
The government aims to amend relevant laws and follow up with changes in regulations to allow easier firm aggregation and expansion.
Officials have also discussed measures to facilitate mergers, multidisciplinary partnerships, and tie-ups with global firms, encouraging Indian companies to operate more freely, advertise, and raise funds and helping domestic firms tap into the $240 billion global auditing and consultancy market.
Last month, the corporate affairs ministry floated a memorandum seeking stakeholder comments on allowing multidisciplinary partnership firms, where professionals from accounting and consultancy can operate under one entity. Current restrictions include bans on advertising, multiple regulators for licensing, restrictive public procurement processes, and limited global collaboration opportunities.
