Category: Report

Security needs collaboration at individual, organizational, industrial, national and global levels. Networking and knowledge sharing are the key drivers for mitigating challenges in today’s complex security environment. India dealt with the economic implications of big-ticket items like demonetization and GST. Even as violence level of Maoist and Northeast insurgencies showed a downward trend, Jammu & Kashmir remained on the boil. Along with the unrest in the border states of the country, civil disturbances in the Indian heartland have continued to occur with various special interest groups agitating to get their demands met – prominent among them being the farmers and identity-based groups. Meanwhile, cyber security continued to be an area of concern during 2017 as in the previous years, with cyber-attacks like ‘WannaCry’ occurring frequently. The year gone by was tumultuous, and a defining one for India from the economic and security perspective. The twin macroeconomic initiatives, in the form of remonetisation and introduction of GST brought about a major upheaval in the cash dependant Indian economy, whose overall impact would be felt in the ensuing years. GST, despite some infirmities, gave a boost to the federal structure and would be a unifying factor by acting as a catalyst for seamless interstate trade. The GST council will become a powerful forum for economic equity. The Indian economy buoyed by reforms and upgradation of the ease of doing business index would grow significantly in the next few years. The Political The political scenario continued to get increasingly polarised with caste and communal politics making a comeback. Slow job growth in the hinterland continues to pose risks of social unrest; fanned by political rhetorics, and would need careful monitoring. The internal security scenario showed improvement and this trend would continue. The Rohingya refugee crisis has been handled satisfactorily by the government, else it would have posed some long-term security risks. Overall, 2018 would usher in improved economic dynamics and a reasonably stable security scenario. – Lt. Gen. Sudhir Sharma (Retd.) PVSM, AVSM, YSM, VSM Chairman, MitKat As we move into 2018, security professionals world-wide will face dynamic and more evolving security threats. With other traditional security threats, terrorism and geopolitical stress will remain areas of concern, along with non-traditional threats in both the physical and cyber realms. Civil unrest, agitations and protests by parties and groups will continue to disrupt business activities, especially in the major cities. Natural hazards such as floods, cyclones and other extreme weather events will pose an increasing threat to the security and business continuity. Keeping in view the ever-changing dynamic security environment in India, it is important to constantly monitor the external threats. Overall business climate in India in 2018 India has adopted a variety of economic reform measures during 2017; most notably the implementation of the Goods and Services Tax (GST) and the demonetization drive that have impacted Indian businesses across the economic spectrum. In October 2017 the International Monetary Fund (IMF) slashed India’s growth forecast by 0.5 percentage points to 6.7 percent in 2017. It has also lowered the growth projection for 2018 to 7.4 per cent from its earlier estimate in April and June of 7.7 per cent. The IMF forecast is in line with a number of recent projections that have scaled down India’s growth prospects for the fiscal due to disruptions from demonetization and GST, despite the government’s strong defense of the moves. GDP growth hit a three-year low of 5.7 per cent in the first quarter of the fiscal. However, the IMF is more optimistic about medium- term growth prospects for India through gains from the new indirect tax levy. India jumped 30 spots in the rankings to 100th place out of 190 countries in the recent World Bank Doing Business report. The Central Government also plans to release a state wise ease of doing business ranking by February 2018 in order to encourage competition and increase transparency. Another vote of confidence in the Indian economy has been the upgrading of India’s sovereign rating by Moody’s to Baa2 (Investment Grade – Stable Outlook), the first such upgrade after 13 years. The rationale behind this upgrade is a strong acknowledgment and endorsement of structural-reforms in the past three years, which are slowly but surely fructifying. The deep rooted and far sighted reforms like financial inclusion (getting the poorest access to the formal banking system), and direct benefit transfer of subsidies (and thereby minimizing pilferage), have significantly led to strengthening of economy. PSU bank recapitalization, aimed at reducing the problem of NPAs in the banking system, is another positive step. Bold foreign direct investment reforms have taken place in 21 sectors along with significant reforms in defence, railways, construction, insurance, pension, civil aviation and pharmaceuticals sectors. Top Business Risks in 2018 Public protests/ strikes Public protests have resulted in serious disruptions during 2017 as most of the protests were spearheaded by farmer unions, labour unions, textile workers and bank employees. The textile industry has suffered a loss of an estimated INR 40,000 crore due to the protest against GST since July 1. The protest by bank employees all over India also led to losses of billions of rupees and this was also reflected in the stock markets over the next few days. Protests against infrastructure projects and land acquisition have also had a significant impact and will continue to do so in 2018 owing to the larger time frame of these projects. The blockade and protests against the Vizhinjam transshipment port led by local fishermen resulted in large losses and delays. Natural disasters Major metropolitan cities continue to remain underprepared to handle severe flooding resulting from the annual monsoons, which usually run from June to September. Many parts of Mumbai, Delhi and Gurgaon, Bengaluru, Hyderabad, and Kolkata are submerged due to waterlogging, resulting in severe disruption to businesses. Extreme flooding brought Mumbai to a standstill in July 2017. India on average suffers an economic loss of US$7 billion each year because of floods, according to the United Nations. In Assam over 5,300 hectares of agricultural…

“The sixth edition of the India Risk Survey is based on a comprehensive survey spanning across several sectors of the economy and geographical regions of India. This survey is an endeavor to examine and evaluate the ‘potentially destructive’ risks to business undertakings in India. The survey encompasses 12 key risks that pose a number of threats to the entire economic ecosystem of the country. It is an attempt to sensitize the Government and the corporate world about emerging risks and possible dangers these risks could pose to business establishments. I  am confident that this report will be of considerable value and will provide a referral to understand the complexity of these risks across the spectrum of stakeholders i.e., policymakers, corporate and individuals of the civil society.” – Dr. A. Didar Singh, Secretary General, FICCI Emerging as one of the fastest growing economies in the world, India is expected to outperform most other major economies in 2017, according to international rating agencies. India is estimated to grow at more than 7 per cent in GDP growth in 2017. Pro-investor policies have been implemented by the government to improve ease of doing business. Through flagship programmes such as ‘Make in India,’ ‘Digital India,’ and ‘Skill India,’ and effectively addressing FDI prospects across sectors, the government is striving to promote manufacturing activity locally, boost job creation and skilled workforce, local and foreign investment, and ITpowered infrastructure capable of supporting logistically-robust and multimodal networks. As per the latest IMF projection, India’s growth rate is expected to be 7.2 per cent in the 2017-18 fiscal year and 7.7 per cent in 2018-19 owing to critical structural reforms, favorable terms of trade, and lower external vulnerabilities. It is encouraging to note that the acceleration of structural reforms is bringing a new growth impetus. The Goods and Services Tax (GST), having implemented from July 2017, should help make India more of a single market and thus spur productivity, competitiveness, job creation and incomes and investment in the country. Risks to business establishments are detrimental to growth and development of any country. The nature of risks globally have changed enormously; and with their occurrences becoming more unexpected and their effects becoming more profound, risks need to be taken more seriously. Further, due to rapid digital transformation of businesses, underlying infrastructure is becoming more complex. In these changing times it is critical to understand emerging risks. Knowledge about impending risks can benefit investors, so that they could take well-informed business decisions. Given that India is increasingly attracting the international business community with its extensive regulatory, legal, and diplomatic manoeuvres, companies cannot underestimate the multitude of challenges in business operations in India; particularly with reference to the vastly divergent risk landscape the country offers. A lack of preparation against risk mitigation could leave the entire financial as well as operational functions vulnerable to attacks with disastrous consequences for a long time. A holistic risk-management strategy would help businesses to both anticipate and preempt existing and evolving risks, and also deal with them effectively. The evolving nature of risks is such that they pose a requirement of being regularly assessed and understood. The inter-linkages between the various risks that exist and demand a holistic approach to safeguard the safety and security of people, assets, and information. India is undergoing drastic changes in terms of development in areas of infrastructure, Information Technology (IT), and so on. As we are blooming into a key business destination, a robust system of protection is crucial. The India Risk Survey (IRS) Report is designed to offer industries and organisations the insight necessary to compete in this increasingly complex operation environment. The India Risk Survey 2017, attempts to highlight the perception of risks from leading businesses, drawing from public voices, as well as professionals from different sectors across the country with a focus on operational safety and strategic risks. The report provides an elaborate telling of the current scenario in terms of global risks and threats. By attempting to cover all the levels of management, from top to bottom, the survey has tapped on various industries including IT, manufacturing, retail, infrastructure, transportation, and finance, amongst others. The survey stretched out to all corners of the country and beyond, including APAC, Americas, and the EMEA region. “The purpose of India Risk Survey 2017  remains to provide a handy guide, calling attention to potential risks, and providing a base for planning the necessary preventive strategies to protect one’s organization from the negative impact of these risks. With every year, the survey aims to engage with the industry, and inform and sensitize all stakeholders about the emerging risks for developing economies like India so that well planned and strategic policy decisions can be made.”   – Rohit Karnatak, MD – India, APAC & EMEA, Global Screening, Pinkerton The survey consists of 12 risks that pose the most significant threats to business perception and operations in the country. The threats are inter connected and overlap across domains, sectors and geographies. New risks have been identified on the basis of this year’s survey, which are Risk of Non-compliance, Business Investment Risk, and Legal Regulatory Risk. Information & Cyber Insecurity India Risk Survey ranks ‘Information & Cyber Insecurity’ as the biggest risk in 2017. In the recent past, there has been an increase in incidences of cyber-attacks and potential espionage on cyber-security. Given the security problems, there should be increased emphasis on, and investment in, the security of cyber infrastructure, and also raising aware­ness for safe usage of cyberspace while on the job and doing personal work. There is an immediate need for more at­tention to counter future cyber-attacks or attempts thereof via rigorous employee training sessions and stronger coopera­tion between business and the Govern­ment on related cyber-security threats. In India, ‘Information & Cyber Insecu­rity’ has become more pronounced due to the shift that the nation is undergoing towards digitisation of various assets and services being delivered via inter­net and mobile platforms; and the ever-present loopholes that hackers breach upon. The WannaCry malware incident has been, by far, the worst incident this year in which several systems were at­tacked,…