INDIA RISK SURVEY 2018
India continues to position itself as an attractive hub for investments from foreign players with an expanding economy and a steady gross domestic product (GDP) growing annually at 7.1%. International forums have indicated that the ease of doing business in India has improved significantly. Pro-investor policies have been implanted by the government to further bolster India’s position in the international market. Through several flagship programmes, the government is striving to promote manufacturing activity locally. Foreign investment and IT-powered infrastructure continue to be developed to further enable support for logistically robust and multi-nodal networks. Emerging possibilities of growth implies risks across all sectors. Companies should expect an array of challenges in business operations in India. A lack of preparation against risk mitigation could result in financial and operational functions. The Government of India continues to make attempts at ensuring that bilateral and multilateral relations remain friendly for businesses to conduct operations. As India prepares itself, as a nation, for another round of general elections in 2019, there has emerged a certain amount of uncertainty regarding business policies and existing schemes. With the upcoming elections in 2019, it is likely that policy change may affect business continuity. A holistic risk-management strategy would assist businesses to anticipate and prepare against emerging and existing risks, thereby, allowing a company to mitigate such risks. The India Risk Survey consists of 12 risks that indicate the most significant threats to business operations and development in India. Each risk is assessed individually, which provides a deeper and more holistic understanding, based on the Pinkerton Risk Wheel. The Pinkerton Risk Wheel frames risk into four broad categories which can help understand not only the different threats that can impact business continuity, but the inter connectivity of risks as a whole. Threats categorized in one risk area ultimately can impact the other risk areas. The risks wheel is divided into four quadrants – Hazard & Event Risk (natural hazards, terrorism & insurgency, crime and fire), Operational and Physical Risk (strikes and unrest, threats to women safety, accidents and infrastructure risk), Market and Economic Risk (political and government instability, corruption, bribery, fraud, and legal regulatory risk), and Technology and Information Risk (information and cyber insecurity, intellectual property theft and business espionage). The India Risk Survey (IRS) aims to measure and quantify the different risks that organizations face when conducting operations in India. The constantly evolving nature of risks compels organizations to safeguard their operations and develop innovative strategies to predict threats. In this seventh edition, IRS 2018 aims to delve deeper into all facets of risks to identify the most prevalent threats under each risk category. Through deliberations with policy makers and industry stakeholders across sectors, each year emerging risks are also identified. The IRS 2018 states infrastructure risks, occupational hazards at workplace and legal regulatory risk as the emerging risks of 2018. In today’s time, policy makers and business leaders can truly fulfil their role by timely anticipating risks. On behalf of Pinkerton, I sincerely hope that the India Risk Survey 2018 report will assist the industry, as well as the government decision makers to assess the impact of these risks and develop preventive strategies to mitigate them. – Rohit Karnatak, Managing Director India, APAC & EMEA – Global Screening, Pinkerton Overall Risk Trends – 2018 India Risk Survey 2018 also provides the most significant threat types within each risk for a comprehensive reading of each threat-vector as part of a larger reality. The threats are interconnected and overlap across domains, sectors and geographies. In the 2018 edition, new risks have been identified on the basis of this year’s survey, which include infrastructure risk, occupational hazards at workplace, and legal regulatory risks. Information and Cyber Insecurity remains at the top position in the India Risk Survey 2018. Considering the importance of cyber critical infrastructure, the vulnerabilities attached to it remain largely underlined in the Survey. Services in India are quickly moving towards digitization. While this could be perceived as a step towards rapid development in various sectors, it also presents risks in which malicious activity can be easily carried out, posing a significant threat to sensitive data. The India Risk Survey 2018 focuses on four major risks posed by Information and Cyber Insecurity. These are data theft, compliance and regulatory incidents, cyber infrastructure attacks, and impersonations. Amongst these, data theft, phishing, and hacktivism emerged as the biggest threat. With India becoming a key destination for businesses and foreign investment, a more serious focus should be directed to create a robust security mechanism to address these challenges. Natural Hazards ranks as the second biggest risk to business operations in the India Risk Survey 2018. As per the findings, floods pose the biggest threat to business operations. Inadequate infrastructure and maintenance by concerned bodies remain a primary factor that would allow natural hazards to pose serious risks to business operations. Further, a lack of preparedness and early warning systems has contributed to making Natural Hazards a risk that should be considered with more seriousness. Outbreak of fire ranks at third position with numerous fire accidents in the current year, causing significant loss of life and property. Non-compliance with safety norms in factories and high-rises in addition to the under-equipped fire services in India has led to an alarming number of accidents year-on-year. While the government and other regulatory bodies have prescribed norms and fire safety measures, implementation and vigilance continue to be a concern. Risks that emanate from Terrorism and Insurgency show a significant drop to the fourth position. While there has been a marked decrease in fatalities, it has been found that there has also been a rise in the number of alleged terrorist attacks in the country. Left-Wing Extremism (LWE) remains a severe threat, posing security risks mainly to logistical operations. While the Islamic State (IS) has been relatively controlled on a global scale, the potential of IS sleeper cells remains a big threat. The Government of India continues to push concentrated efforts to holistically counter the threats…