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 of terrorism and insurgency – internal as well as external. India continues to strengthen its domestic capabilities in hostile regions and at the borders. Simultaneously, the government is also strengthening ties on bilateral and multilateral platforms to tackle the risks posed by terrorism to ensure that business operations and personnel are secure and safe.

Political & Governance Instability’ ranks fifth position this year. The Survey finds that certain policy changes are perceived as a threat under this risk category. It is assessed that the general elections to be held across the country in 2019, led to a perception of increasing uncertainty, causing the risk to climb up one spot to number 5 position in 2018. This risk is closely observed by investors, foreign and domestic, and would impact business development and continuity plans for the economy as a whole.

The survey finds that growing political instability has become a major cause for concern, which has resulted in violent clashes and unrests in several parts of the country. The implications posed by risks from Strikes, Closures, and Unrest, which is ranked sixth, have direct implications on financial losses incurred by businesses, and a slow-down in the business development. Further, the country’s reputation perceived as inhospitable for business to flourish also affects future prospects. Instability and threatening business operations directly impact the market by affecting investor confidence and increase in the risk premium assigned to securities in the country. The government continues to take steps to rectify situations by addressing worker disgruntlement through legal changes and reforms.

According to the India Risk Survey 2018, Crime ranks on the seventh position. India is ranked 136 out of 163 countries in the Global Peace Index 2018, moving up just one position as compared to a jump of six positions in 2017. It is noted that the risk of crime in India has seen a steady decline over the last few years. The government and police have made use of social media and digital platforms to reach more people and ensure more efficient policing. Various police departments have taken to using social media as a tool for crime prevention. The India Risk Survey 2018 finds that threats to security and safety posed by violent crimes such as kidnapping and murder, are the biggest risk to company personnel.

‘Corruption, Bribery & Corporate Fraud’ continues to be one of the biggest risks faced by businesses in India, which ranks eighth in the India Risk Survey 2018. The perception of the risk has fallen with India incorporating economic reforms to ensure that global investors are appeased. According to the World Bank’s Doing Business 2018 rankings, India has jumped from 130 in 2017 to 100 in 2018 out of 189 countries. ‘Corruption, Bribery & Corporate Fraud’ as a risk, however, continues to hinder growth and cause disruptions in progress. It dissuades potential investors and diminishes the growth opportunities of existing players. Investors have called for better corporate governance and more stringent regulation of business corporations.

Business Espionage remains in the ninth position in the India Risk Survey 2018. As per the Transparency International’s Corruption Perception Index 2017, India ranks 81 with a score of 40. This is in contrast to a ranking of 79 in 2016, also with a score of 40. While the India Risk Survey 2018 places Business Espionage on the ninth spot, business developers and investors should remain focused on the risks associated with it, which should be mitigated at all costs. Due to the sensitive nature of critical infrastructures of businesses today, particularly the cyber-domain, business espionage is becoming increasingly more sophisticated and more covert. Hence, detecting and mitigating the risks involved becomes more difficult.

Threats to women safety ranks tenth in India Risk Survey 2018. Harassment of women in the workplace is assessed as a growing risk faced by businesses in India. The prevention of sexual harassment in the work place is a responsibility that has to be largely borne by the employer. Corporates, in their own best interests, should streamline and strengthen their internal policies on sexual harassment.

Risks to business establishments are detrimental to the growth and development of any country. The nature of risks globally has 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 businesses, especially MSMEs and start-ups, so that they could take well-informed decisions.

The seventh 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.

– Dilip Chenoy, Secretary General, FICCI

The India Risk Survey finds that ‘Accidents’ climbs one spot to be at 11th position from 12th last year. The survey finds that traffic accidents have been the most significant threat within the risk. According to media sources, a report published on 10 January 2018, nearly 400 fatalities a day are caused by traffic accidents in India. The source further reported that the Government of India is attempting to curb the rising trend on Indian roads. The growing trend of fatalities caused by occupational accidents implies increased liability for business, particularly for the insurance sector. Injuries caused by occupational accidents can also impact operations with probable reduced productivity, lower sales, and possible disrupted business continuity.

The India Risk Survey 2018 finds that risks associated with Intellectual Property (IP) Theft ranks twelfth. While there has been a slip in its ranking, IP theft is still a threat that could significantly affect a brand name and reputation. With India’s IP policy coming closer to international norms, research and development have also seen an improvement.

Factors influencing the risk gainers

Natural hazards


According to the media reports, a disaster risk index prepared by the Government of India along with the United Nations Development Programme, assesses hazards and vulnerabilities across 640 districts indicating that Maharashtra is the most vulnerable and prone to natural disasters, followed by West Bengal, Uttar Pradesh, and Madhya Pradesh. Among the Union Territories, Delhi positions itself to be the most vulnerable to such disasters.

Threat mapping

The survey identifies flood as the most significant risk to businesses and communities in the country. In August 2018, the state of Kerala experienced what has been considered as the worst flood in the region of the century following incessant rain. According to the media reports in August, property worth more than INR20,000 Crores (USD2755.01 million) has been destroyed, and insurance companies have reportedly received claims worth over INR1000 Crores, (USD137.67 million). Nearly one million people have been displaced and nearly 400 deaths have been reported.

This year, incidences of drought were also reported in India. According to reports, Shimla experienced severe droughts with water supply decreasing by an estimated 50% of the daily requirement. The crisis has affected the tourism industry which the hill station is known for. Fragile infrastructure, dilapidated buildings, and weak conditions of logistic chains have a crucial impact and substantially increased the risk of extreme natural events.



Non-compliance to safety norms in factories and highrises, lack of institutionalized funding and underequipped fire services in India have led to an alarming number of accidents in the country. Electric short circuits have been rated as the most significant threat under the risk category of fire.

The National Crime Records Bureau (NCRB) data recorded a total of 1,13,961 deaths due to fire accidents between 2010 and 2014 at a startling average of 62 deaths per day.

Threat mapping

Mumbai alone has witnessed 12 major fire tragedies and 22 deaths since the Kamala Mills fire that killed 14 people in December 2017.

The cause-wise analysis of fire accidents indicates that 29% were incidents at residential buildings while those at factories manufacturing combustible goods accounted for only 1.42%.

Strikes, Closures & Unrest


India Risk Survey 2018 finds that growing political instability has become a major cause for concern, which has resulted in violent clashes and unrests in several parts of the country.

The implications posed by risks from strikes, closures and unrest have direct implications for financial losses incurred by businesses and a slow-down in business development.

Threat mapping

On 2 January 2018, it was reported that thousands of Dalits in Mumbai staged a protest, which disrupted local train services in the city. On May 23, 2018, it was reported that the Madras High Court’s Madurai Bench stayed the construction of a leading manufacturer’s new copper smelter plant in Tuticorin resulting in protests. It has been further reported that police opened fire against thousands of protestors. Thirteen casualties were reported and several others were injured.

Risk Ranking – Comparative Perspectives on Risk

Govt./ PSU Vs Private Sector

The survey results suggest that the perception of risk categories remains the same as last year between the Government/ PSU and the Private sector, with ‘Information & Cyber Insecurity’ remaining as the greatest risk to their operations. This perception can be attributed to a sustained increase in attempted cyber-attacks and potential espionage on cyber-security this year. As per the report, data theft, phishing and hacktivism pose the biggest threat under this risk category. The information and cyber domain remains one of the most important critical infrastructures for the government and the private sector, with the government’s extensive shift towards digitization. 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 ‘Terrorism & Insurgency’ as the second highest risk to its operations, the same is ranked at No. 4 by the private sector; The government/ PSU rates ‘Natural Hazards’ as the third highest risk whereas private sector ranks ‘Fire’ at number 3. The Government/ PSU ranks ‘Fire’ at number 5 whereas Private sector places ‘Political & Government Instability’ at the same rank. Private sector ranks ‘Crime’ at number 7 whereas Government/ PSU places ‘Corruption, Bribery & Corporate Fraud’ at the same position. ‘Business Espionage’ is ranked at number 9 & ‘Intellectual Property Theft’ at number 12 by both segments.

Risk Ranking – Company Turnover

The survey includes a study of the risk perception by companies on the basis of their turnover, giving an overview of the nature of challenges faced by small & medium level enterprises in comparison to large corporations. For the purpose of the survey, the companies were segregated according to the turnover, viz., Upto INR100 crore (USD13.9 million), Between INR100 crore to 200 crore (USD13.9 – 27.83 million), and companies with a turnover of more than INR200 crore (USD27.83 million). For medium-scale companies with a turnover between INR 100 crore to 200 crore (USD13.9-27.83 million), as well as large corporations with an annual turnover exceeding INR 200 crore (USD 27.83 million), ‘Information & Cyber Insecurity’ was ranked as the primary risk. For small-scale companies with a turnover of Upto INR 100 crore (USD13.9 million) ‘Natural Hazards’ was the primary risk.

While medium-scale companies ranks ‘Business Espionage’ second most risk, for smallscale companies ‘Information & Cyber Insecurity’ was the second most risk. Natural Hazards came at 2nd spot for large corporations. For companies exceeding an annual turnover of INR200 crore (USD27.83 million) rated ‘Terrorism & Insurgency,’ ‘Political & Government Instability’ & ‘Fire’ as among the top five risks. Similarly, small companies ranked ‘Fire,’ ‘Terrorism & Insurgency’ and ‘Strikes, Closures & Unrest’ among the top five threats besides ‘Natural Hazards’ & ‘Information & Cyber Insecurity’ risk. For medium-scale companies ‘Strikes, Closures & Unrest,’ ‘Fire’ and ‘Terrorism & Insurgency’ constitute among the top five risks.

‘Corruption Bribery & Corporate Fraud’ ranked at 8th position across the company segments, while ‘Accidents’ is  the lowest perceived threat among medium scale companies & large corporations though it still remains a threat to business operations.

Region wise risk ranking

Two regions of India – South and West – view ‘Information & Cyber Insecurity as the top most risk for businesses in the country, whereas the East region perceives ‘Political & Governance Instability’ as the highest risk for business operations and investments. This rating is because of the increasing unrest in the region. The North region perceives ‘Natural Hazards’ as the topmost risk for business operations. The eastern region ranks ‘Information & Cyber Insecurity’ and ‘Strikes, Closures & Unrest’ at No. 2 & No. 3 respectively. Based on key local challenges and concerns the western region rates ‘Natural Hazards’ and ‘Fire’ at the second and third position respectively.’ Information & Cyber Insecurity’ and ‘Fire’ constitute No. 2 and No. 3 in risk ranking perceptions for the northern region. The southern region of the country ranks ‘Corruption, Bribery & Corporate Frauds’ and ‘Crime’ at No. 2 and No. 3 respectively. For respondents from outside of India, ‘Natural Hazards’ comprises the top most risk, followed by ‘Terrorism & Insurgency’ and ‘Information & Cyber Insecurity’ at No. 2 and No. 3 positions respectively. Pan India respondents also ranked ‘Natural Hazards’ as the highest risk, followed by ‘Information & Cyber Insecurity’ and ‘Business Espionage’ as the other two key risk to businesses.

Industry Wise Risk Ranking

Industry-wise rankings of risk categories present a varied, comprehensive and sectoral perception. ‘Information & Cyber Insecurity’ is ranked the top risk by the Education, Govt./ PSU, Financial Services, Infrastructure, Logistics & T   ransportation, Medical Services, Telecom and Others. For the eCommerce and Hospitality sectors, ‘Corruption, Bribery & Corporate Frauds’ holds the top most position. ‘Natural Hazards’ is the second leading risk for sectors including e-Commerce, Financial Services, Infrastructure, Logistics & Transportation, Media & Entertainment, Medical Services, Retail, Security Service Providers, Telecom and Others. For a majority of sectors ‘Natural Hazards’ has entered in the top three risk category and is considered to be one of the colossal key concerns for business operations in the country. For a majority of sectors, risks such as ‘Terrorism & Insurgency’, ‘Fire’, ‘Political & Governance Instability’ and ‘Business Espionage’ are the primary concerns and constitute among the top five perceived risks. ‘Strikes, Closures & Unrest’ is indicated among the top five risks observed in the E-Commerce, Manufacturing, Security Service Providers and Others. The Govt./ PSU, Media & Entertainment and the Non-governmental organization (NGOs) perceive ‘Threats to Women Safety’ as the fourth most important and concerning risk.

Risk Categorization

The IRS 2018 segregates risks into three categories, viz., Strategic, Operational and Safety risks. Strategic risks are those that impact directly the achievement of an organization’s business objectives. At the national level these are risks which have a grave impact on national security and its survivability. Strategic risks are majorly determined by the top leadership of the organisation.

Operational risks are defined as the probability of loss occurring from the internal inadequacies of an organisation or a breakdown in its controls, operations or procedures. Lastly, Safety risks are those risks which have the potential to jeopardise employee safety.

These could be either internal or external or both. Employees being the critical assets to an organisation, any potential hazard or threat to their safety could affect business continuity. The graph on ‘categorisation of risk’ represents a particular risk that falls within the categories of either Strategic, Operational or Safety risks. The probability and impact of these risks illustrate their importance to the corporate sector. The categorisation is generic. Some of the risks considered ‘Strategic’ for some industries can be categorised as ‘Operational’ risk for another set of industries.

Overall Risk Ranking

The India Risk Survey presents the perception of various categories of risk by business leaders, professionals in public and private sectors spread across the country. As with any country facing challenging environments, India continues to tackle the dynamic and demanding environment with regard to the changing threat perceptions. India Risk Survey 2018 thus tries to delve and encapsulate the movement of a particular risk in the spectrum comprising a set of 12 risks. This year the report has also captured the most prevalent threat under each risk as per the responses provided by surveyors.

The India Risk Survey 2018 is a joint effort of FICCI and Pinkerton to highlight potential threats and severity of such risks and their impact. The results of the survey are based on a collation of a set of 12 risks that have been identified after a series of discussions & deliberations with stakeholders across sectors. The survey thus aims to focus on the major risks that have the potential to adversely impact businesses in India. The India Risk Survey also provides inputs that would be beneficial in cross-sector business leadership in devising risk-mitigation strategies to ensure a secure business environment. However, due to the multi-dimensional nature of risks, and their impact, the applicability of each risk to individual organizations may vary.

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