Navigating Compliance Risks in the Indian Subcontinent
Capitalising on the untapped growth potential of emerging economies makes the prospect of doing business in these markets an irresistible proposition. High GDP outlook, unsaturated markets, expanding consumer bases, favourable foreign direct investment and pro-business policies, are all factors that combine to create a picture of booming business opportunities in countries like India, Indonesia, Vietnam, or Brazil. Yet these powerhouse economies are complex to operate in, and as a result can bring significant challenges to effectively navigating compliance risk.
Emerging Markets Defy a Homogeneous Identity
Each market has very different specific challenges and risks, though all generally emanate from the same factors: bureaucratic and regulatory hurdles; a somewhat institutionalised culture of tolerance toward corruption and bribery; gaps between policy and implementation at the government level; and underdeveloped ethical, governance, and transparency structures. In the Indian subcontinent, these challenges are compounded by economic inefficiencies, escalating chances of legal challenge and criminal liability and rising reliance on third parties.
"Known risks in emerging markets may be magnified while unknown risks are likely lurking."
All together, these challenges jeopardise investments and heighten the chances of exposing companies to reputational disasters and frustrating or foiling business efforts by forcing companies to divert resources for containment of crises. To successfully navigate these challenges, companies must adequately assess the risk of their investment and implement adequate mitigation strategies.
Senior Managing Director