ICAI prepares draft to aid CA firms in overseas networking

In a strategic move to bolster India’s homegrown audit, accounting, and advisory firms, the Prime Minister’s Office (PMO) is championing their growth, leading the Institute of Chartered Accountants of India (ICAI) to draft ‘Overseas Network’ guidelines. This initiative aims to create a regulatory framework that fosters the development of professional networks for Indian Chartered Accountancy (CA) firms, enabling them to compete more effectively on both domestic and international fronts.

The ICAI emphasises the necessity of this framework, stating, “There is a need to open up the profession of CA to a more globalised environment where India could not afford to get itself isolated.”

These proposed guidelines will allow ICAI member firms to collaborate with overseas networks, both within India and abroad. The draft outlines key aspects such as registration, changes in constitution, and annual return filings, and mandates that each overseas network designate a nodal officer responsible for compliance with ICAI guidelines.

This push for global competitiveness is part of a broader effort to help Indian firms stand against international giants like EY, PwC, KPMG, and Deloitte. Complementing the overseas network guidelines are revised guidelines for the merger and demerger of CA firms and new guidelines for the aggregation of Limited Liability Partnerships (LLPs).

The aggregation guidelines, issued in January, allow an LLP (an Indian CA Firm) to partner with another LLP or CA Firm, offering a powerful tool for strategic growth. This enables firms to expand capabilities, broaden market presence, and achieve operational efficiencies by combining resources and diversifying services. FAQs for these LLP guidelines are expected soon.

The ICAI’s revised merger and demerger guidelines aim to streamline processes and remove practical obstacles that previously hindered CA firms from pursuing such strategic consolidations. To further facilitate these collaborations, the regulator is also developing a dedicated networking portal to help members connect, share resources, and leverage complementary strengths through networking, mergers, partnerships, and collaborations.

This comprehensive approach underscores the government’s commitment, with Principal Secretary to the Prime Minister, Shaktikanta Das, having chaired a meeting to brainstorm these issues, leading to the formation of a committee under Corporate Affairs Secretary, Deepti Gaur Mukerjee, to suggest further pathways.