Dr. A. Didar Singh Secretary General, FICCI“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.

Rohit Karnatak APAC & EMEA - Global Screening, PinkertonThe 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, both of the public and the private sectors. The focus should be to create a robust security mechanism to address the cybersecurity challenge. This would establish stronger trust between Indian companies and foreign industries.

Terrorism and Insurgency

‘Terrorism and Insurgency’ has been ranked as the second biggest threat to businesses in India, with the risk rising up two spots from its position last year. India has featured 16 times in Global Terrorism Index in the list of 10 countries most affected by terrorism during 2000- 2016. Left-wing extremism (LWE) per­petrated by communist terrorist groups remains the most severe terrorist threat, primarily in the states of Bihar, Chhat­tisgarh, Jharkhand, and Odisha. While Is­lamic State (IS) has made inroads to the country, India’s security agencies have been adept at intercepting and counter­ing the threat. The persistent risk posed by ‘Terrorism and Insurgencies,’ creates a risk perception in the minds of inves­tors with interest in the Indian market. The higher the risk of terrorism, higher is the perceived risk associated with do­ing business in the country. India has in­vested heavily in its security capability to mount effective counter-terrorism and counter-insurgency operations, however, the effects of the perception of this risk continue to affect businesses especially with respect to foreign investment.

Corruption, Bribery & Corporate Frauds

The ranking of ‘Corruption, Brib­ery & Corporate Frauds’ find it­self at number 3 position in IRS 2017. As per World Bank’s Doing Business 2017 rankings, India currently stands at 130 out of 189 countries. India has been engaging to combat corruption at every level. Though there is an overall sense of lowering corruption, bribery and corporate frauds via influence of new regulations such as GST, Demoneti­sation, Make in India, the Digital India programme; yet the nature of the risk is such that it continues to pose an increas­ingly greater threat which refuses to be completely removed.

Natural Hazards

India is considered at a ‘high risk’ of natural hazards with flooding identi­fied as the most significant risk to busi­nesses and communities. The Survey ranks ‘Natural Hazards’ fourth highest risk to businesses, up from last year’s seventh position. In comparison with developed economies, India has scope to strengthen its institutional capacity, financial resources, and infrastructure to mitigate the adverse effects of natu­ral hazards. Floods, earthquakes, and cyclones ravage the country every year, causing human and financial loss. In De­cember 2016, Cyclone Varda hit Chen­nai and adjoining coastal areas causing large-scale disruption to business opera­tions and severely damaging the agricul­ture sector, costing the economic loss of INR 141 billion (USD 2.2 billion).


‘Fire’ ranks fifth, up from three positions from last year. According to NCRB, a total of 18,450 cases of fire accidents were reported in India in 2015, with 1,193 persons injured and 17,700 killed, of which 42.1% of deaths were due to fire accidents in residential buildings. The majority of fire accidents were re­ported in Maharashtra, which accounted for 22% of all.

Political & Governance Instability

‘Political & Governance Instability’ continues to hold its position as num­ber 6 risk in the India Risk Surveys for 2017 and 2016 respectively. The impact of ‘Political & Governance Instability’ in the India Risk Survey 2017 has been in­dicated primarily as a result of the legis­lative assembly elections that were con­ducted in 2017, and that of the upcoming legislative assembly elections in 2018. It should be noted that the Central Govern­ment continues to push reforms for cre­ating a more conducive environment for business to flourish and to further attract more investors. However, social tensions and unrest, and strained political dead­locks continue to be a stumbling block.

Strikes, Closures & Unrest

In contrast to last year’s survey, ‘Strikes, Closures & Unrest’ dropped six posi­tions to rank seven; although labour unrest in the country was rampant and led to disruption in business continuity, causing the increase in operational cost. In ‘the world’s largest ever’ industrial action in September 2016, an estimated 180 million Indian public sector workers went on a 24-hour general strike against the labor and economic policies of the government. Industries dominated by blue-collar jobs that employ low-skilled labourers are faced with criticism regard­ing inadequate working conditions and unsatisfactory compensation.

In the agricultural sector, that em­ploys 47.2% of the population, farmer distress led to widespread agitations. In June 2017, farmers’ agitation in Maha­rashtra and Madhya Pradesh demand­ing higher prices for their produce and a loan waiver impacted the food prices and the supply of raw products like veg­etables, fruits, and meat to wholesale markets and manufacturing industries.


Crime remains a serious concern for the Indian economy as it reflects a breakdown of public law & order and permeates all sections of the society. ‘Crime’ as a risk fac­tor dropped to the eighth position in 2017, from its third ranking in the last year’s India Risk Survey. However, as per National Crime Records Bureau (NCRB) data, overall crime in India increased by 1.3% in 2015. A total of 73, 26,099 crimes were reported, with 29, 49,400 crimes registered under the Indian Penal Code (IPC) and 43, 76,699 under Special & Local Laws (SLL). Delhi accounted for 25% of all crimes registered in major Indian cities.

Methodology and respondentsmethodology consisted of a risk survey 1

The methodology consisted of a risk survey that was administered across India and abroad. The respondents varied from employees from lower, middle to upper management professionals. The highest risk is ranked at number 1 and the lowest at number 12.


Business Espionage

‘Business Espionage’ climbed one spot to ninth position in IRS 2017. The current scenario is looking at a more pressing task in avoiding business espionage. Due to the sensitive nature of critical infrastructures of businesses today, namely the cyber-domain, busi­ness espionage is becoming increasingly more sophisticated and more covert. This makes it difficult to detect and ad­dress an issue. The inherent problem with business espionage is the possible domino-effect which would lead to an extensive collapse within a company.

Intellectual Property Theft

‘Intellectual Property (IP) Theft’ climbed one position to tenth rank in the IRS 2017. With major changes setting regarding India’s position as an indus­trial destination, the issue of IP theft has achieved more importance. India’s posi­tion in the US Special 301 list does not put India in the most favourable position. The Indian Government laid out the new Intellectual Property Rights Policy which aims to promote research and develop­ment through tax benefits and is likely to result in a positive investment regime in the country. On the issues of counterfeit and piracy of films, music and software, the illegal activities are still prevalent.

Threats to Women’s Safety

‘Threats to Women’s Safety’ at work­place ranked eleventh in IRS 2017. The dangers and implications of threats to women’s safety at workplace are of critical importance. IRS 2017 has given special attention to this risk as there is a need to create stronger and wider aware­ness for women to feel comfortable and safe while at the workplace and while commuting.

AccidentsOverall Risk Rating

‘Accidents’ retain the 12th position in the risk ranking in IRS 2017. Acci­dental deaths require a comprehensive study due to the different incidents that fall under the category. The incidents will always have a direct impact on the business. Higher incidence of accidents, whether industrial or individual, increas­es liability for businesses, particularly for the insurance sector.

Trend Analysis: Comparative perspectives on risk

Govt./ PSU Vs Private Sector

The survey results suggest that the perception of risk categories moderately differs between the Gov­ernment/ PSU and the private sector. This is a significant change from the 2016 survey findings which observed a significant difference in perceptions between the sectors. Both the Gov­ernment/ PSU and private sector have ranked ‘Information & Cyber Insecuri­ty’ as the greatest threat to their opera­tions. RISK RANKING - GOVT PSU Vs PRIVATE SECTORThis perception can be attributed to a substantial increase in the attempt­ed cyber-attacks and potential espio­nage on cyber-security this year. The information and cyber-domain remains one of the most important critical in­frastructure for the government and the private sector, with the government’s extensive shift towards IT-powered gov­ernance. This, coupled with the private sector’s multi-modal engagement and investment in the sector has made it the most vulnerable to attacks. Protection of critical infrastructure operations has emerged as a major challenge for the government and corporate sectors.

The Government/ PSU rates ‘Po­litical and Governance Instability’ as the second highest risk to its operations, the same is, however, ranked at No. 7 by the private sector. ‘Terrorism & Insurgency’ has been equally perceived as the third highest threat by both.

Company turnover

For the second consecutive year, the survey included a study of the risk perception by companies on the basis of their turnover, giving a peek into the nature of challenges small and medium level enterprises face in comparison to large corporations. For the purpose of the survey, the companies were graded according to the turnover viz. up to INR 100 crores (USD 15.46 million), between INR 100 crores to 200 crores (USD 15.46-30.93 million), and compa­nies with a turnover of more than INR 200 crores (USD 30.93 million).Risk Ranking – Company Turnover

Companies exceeding an annual turnover of INR 200 crores (USD 30.93 million) and below INR 100 crores rated ‘Information & Cyber Insecurity,’ ‘Cor­ruption, Bribery & Corporate Frauds,’ and ‘Terrorism & Insurgency’ as the top three risks respectively. For medium-scale com­panies, however, ‘Political & Governance Instability’ makes the second risk.

Region wise risk ranking

Three regions of India – North, South, and West – view ‘Informa­tion & Cyber Insecurity’ as the top most risk for businesses in the country. How­ever, the East region perceives ‘Natural Hazards’ as the highest risk. This rat­ing is because of the annually observed seasonal flooding during the monsoon season, resulting in the shifting of ma­jor rivers, and causing landslides and infrastructural damage. Top three risks in each region of IndiaThe hilly and forested terrain of India’s north-eastern states is another key risk for businesses in the region. The eastern region ranks ‘Political & Governance Instability’ and ‘Information & Cyber Insecurity’ at No. 2 and No. 3, respectively.

For respondents from Outside of India,‘Information & Cyber Insecurity’ comprises the top-most risk, followed by ‘Terrorism & Insurgency’ and ‘Corrup­tion, Bribery & Corporate Frauds’ at No. 2 and No. 3 positions, respectively.

Industry wise risk ranking

Industry-wise ranking of risk categories present a more comprehensive, diverse, and sectoral perception. ‘Information & Cyber Insecurity’ is ranked the top risk by the education, Government/ PSU, Fi­nancial Services, Infrastructure, IT/ ITES, Logistics & Transportation, Manufactur­ing, Medical Services, Security Service Providers, and Telecom sectors. For the e-Commerce, Media & Entertainment, and NGOs sectors, ‘Natural Hazards’ consti­tute the highest risk. ‘Terrorism & Insur­gency’ is the top risk for sectors including Hospitality and Others. For the Retail sec­tor, ‘Political & Governance Instability’ presents the highest risk. For a majority of sectors, risks such as Terrorism & In­surgency,’ ‘Corruption, Bribery & Corpo­rate Frauds,’ ‘Fire,’ and ‘Strikes, Closures & Unrest’ are the primary concerns. For most sectors, the top five risks are pri­marily a combination of these perceived threats. The e-Commerce sector perceives ‘Intellectual Property Theft’ and ‘Busi­ness Espionage’ as the second and third-most important risks. ‘Threats to Women Safety’ have been indicated among the top five risks observed in the Hospitality and e-Commerce sectors.

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