Find out how to achieve your goals legally
Corruption is the only promising path in India? No. After 25 years in the Indian market, we can definitely assure you: compliance is very much possible in India.
Prejudice
Time and again, we hear from European companies in the Indian market that corruption is unfortunately unavoidable in some areas of business practice. They are repeatedly and credibly assured of this by consultants and this is also their experience.
We cannot share this view from our decades of experience in India. Whether you want to acquire a good piece of land for your production site, whether you need registration, are facing additional demands from customs, have a dispute with the tax authorities, want to apply for an environmental impact certificate or have to set up a company – you will be able to achieve your goal through clean channels, without “risk surcharges”, special services or similar. to achieve your goal. It may be that some processes simply take a little longer and may seem a little more expensive at first. In the long term, however, honest behavior pays off in India.
The question is whether you as a company are prepared to accept this. Time and again, we observe that many European companies are not very vigilant and lack any sense of disruption when consultants or local partners offer them a (conspicuously) quick and cost-effective solution to their problems. Where they would probably be alert in their private lives, as companies they are happy to be blind. Only when they look back on the consequences of incorrect behavior do many of them open their eyes – and then, unfortunately, usually too late.
Unfortunately, it must also be noted that many consultants and even sometimes employees of public authorities are not familiar with compliance-compliant methods, as the regulations in India are complex and require specific knowledge. On the other hand, India does not enforce correct behavior, as the understanding of compliance-compliant behavior is often different and there is no corresponding long-standing social tradition as in the USA, for example.
Risks
Anyone who flirts with “dirty ways” is definitely on the wrong track and ill-advised. The risks you expose yourself to as a company if you do not adhere to compliance regulations in India are considerable. And it doesn’t matter whether you have received such incorrect “tips” from consultants or your cooperation partner. If such a consulting firm/partner becomes the focus of the Indian judiciary, it can also be very unpleasant for you. It may well be that the corresponding offenses are only dealt with years later and, with luck, the statute of limitations has already expired – but the Indian authorities will not let up and will examine your “store” from various perspectives.
But regardless of the state sanctions you face, there is another, equally unpleasant danger: you make yourself vulnerable to blackmail, vulnerable and dependent – for life. People with whom you certainly don’t want to have any contact have lists of employees and companies “you can get something from”. Trust us: you don’t want to end up on such a list.
Solution
Don’t use the preconception that India is corrupt, that “risk premiums” and “creative” solutions are essential.
- Train your local Indian team on compliance-compliant behavior. This includes, above all, the aspect of sensitivity: What is correct behavior in the relevant procedure, etc.?
- Create a corporate culture that allows your employees to talk about uncertainties and incidents.
- Install an internal whistleblower system that enables employees to anonymously report suspicious facts or incidents.
- Conduct regular internal audits understood as a creative instrument, not as a punishment or “policing” measure.
- Live with the expectation that offenses such as corruption payments, balance sheet falsification, etc. will also occur in your company.
- Seek professional support if you have the feeling that the only way to achieve your goals is to take the wrong route and be wary of consultants who try to tell you this or present you with overly quick solutions.
Conclusion
The temptation to circumvent onerous compliance regulations in India is great. Numerous consultants and partners will credibly assure you that the only way to reach your goal is through corruption and “risk premiums”. However, the added value of a lack of compliance is only short-lived. Long-term success and personal freedom are only guaranteed by compliant behavior. Trust advisors and partners with integrity and listen carefully if they only know “creative” ways. Strengthen and train your Indian team so that everyone stays clean.
We have been advising on all strategic issues in the Indian market for more than 20 years. We know how you as a company can stay clean and still achieve your ambitious goals. And we know what to do when “the child has fallen into the well”. Get in touch with us now. We look forward to hearing from you.
