Bribery, Anti-Money Laundering And Corruption Risks For The New Breeds Of Multi-National Companies In India

For both MNCs looking to invest in India and Indian companies looking beyond borders, compliance with extra-territorial bribery and anti-money laundering requirements will be crucial in protecting both reputation and balance sheets

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Economic conditions have improved rapidly in India, bringing with it a host of risks and rewards. An unwilling member of the “Fragile Five” in 2013,1 the Indian government has worked hard to develop and refocus its economy. Merely five years later, India has the fastest-growing large economy in the world – attracting $40 billion of foreign direct investment in 2017 – and has a new focus on modern industries, such as technology and financial services. These developments have attracted two types of companies: multinational companies looking to invest in India, attracted by the booming population and wealthy middle-class; and Indian companies looking to expand their customer bases and develop into new markets beyond Indian borders. But for both these types of companies, compliance with extraterritorial bribery and anti-money laundering requirements will be crucial in protecting both reputation and balance sheets.

How did India’s PM Narendra Modi do it?

PM Modi’s government has adopted several new strategies to promote the Indian economy to the international stage and revolutionize it into the 21st century. Several of these strategies included: the 2016 demonetization policy, which invalidated billions of 500 and 1,000 rupee banknotes in a crackdown on tax dodging and funding of terrorist activities; the ‘Goods and Services Tax’ regime, intending to reduce the burden of taxes; and the Insolvency and Bankruptcy Code, 2016, which speeds up the time taken to turnaround bankrupt firms.