Control Risks

Grey practices: fuelling fraud and corruption in the Indian business environment

By James McAlpine

It is widely acknowledged that India is an extremely complex market in which to operate — a commercial landscape littered with legal, regulatory and reputational obstacles that is not for the faint-hearted. Navigating this environment and the risks involved can be a Sisyphean task, but for those with the courage and integrity to persevere the rewards can be impressive.

Control Risks has been assisting clients to manage such risks in India for upwards of two decades, and our experience and understanding of the local operating environment is second to none. In an effort to share some of the insight we have gained over this time, our experts have developed this white paper to address the thorny issue of so-called ‘grey practices’ in India, which are increasingly causing problems for both domestic and international companies, as well as attracting the scrutiny of foreign regulators.

As our paper outlines, there are two distinct forms of corporate malpractice in India: those that are clearly illegal (the black practices) and those that are less clear cut and fall into a grey area where legality is ill defined (although integrity and morality are often not). These grey practices are the schemes — often highly innovative in themselves — that in turn tend to fuel fraud and corruption on a far grander scale that can pose serious legal, commercial and reputational risks to companies that are not alert to the dangers…

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