In today’s digitally intertwined world, data rarely stays confined within national borders, and neither do the laws that govern it. Cross-border data transfers are now a routine part of global business, but they come with legal and operational risks. In India, the average cost of a data breach has surged to US$2.52 million, highlighting the financial impact of non-compliance.
India’s maritime sector plays a crucial role in the national economy and strategic planning, supported by a 2,500-kilometre coastline and a network of 12 major and over 200 minor ports. With around 95% of trade by volume and 70% by value moving through maritime transport, the sector plays a significant role in building the nation’s GDP. This growth brings increased complexity and demands stronger oversight. Maritime compliance and risk management goes beyond ships and ports, they extend across the entire supply chain, including factories, refineries, trucking companies, and key personnel.
In today’s business environment, reputation risk is a growing concern for organizations. A recent survey claims most professionals anticipate a rise in financial crime, while only 36% consider their company’s compliance program as highly effective – a clear gap between rising threats and organizations’ ability to manage them. To protect reputation, financial stability, and regulatory compliance, Integrity Due Diligence helps businesses identify and mitigate risks.
Risks in the supply chain is not only from the product itself, but many also arise from people, locations, and hidden connections. A recent report revealed that ~9% of reported issues stem from poor due diligence on people and third-party partners behind them. While companies are often diligent about verifying the quality of products and services, they frequently overlook the stakeholders behind them.
In a recent incident, a startup reported over $200 million in revenue for 2024, a 3x exaggeration over its actual earnings. This involved billing another entity for services that never occurred, creating an illusion of growth and of valuation. Such practices reflect a deeper issue: the growing misuse of financial data in pursuit of market advantage, which undermines transparency and raises serious concerns about corporate ethics.
Due diligence is a critical process that must be executed with care and integrity. Its proper execution is essential to make informed choices. When this process is performed merely as a procedural formality, it fails to fulfil its core purpose. In certain cases, due diligence that is not just inadequate but deeply flawed or neglected is referred to as egregious due diligence.
Compliance in India has changed over the years. India’s regulatory universe is estimated to comprise 1,536 Acts, 69,233 compliances, and 6,618 filings. Keeping track and staying compliant is a big challenge that companies face these days. As compliance requirements have evolved, the approach has also changed. From traditional methods to technology-integrated models are being adopted to make the process easier.
Cross-border M&A is a powerful strategy for companies aiming to expand globally, access new markets, and unlock operational synergies. According to statistics by the Ministry of Industry and Commerce, India’s gross FDI inflows crossed US$1 trillion between 2000 – 2024. As the volume and complexity of such transactions increase, robust due diligence has become more critical than ever. It allows acquiring companies to thoroughly assess the financial, legal, and operational health of their target enterprises.
Employment related frauds have surged significantly with the rapid evolution of technology. This is validated by most studies and reports. A report by Data Security Council of India (DSCI), revealed that nearly 60% frauds in the IT and BFSI sector involved impersonation of employees or clients. Employment related fraud spans industries undermining overall organizational trust. To address these risks, organizations do recognize the importance of conducting in-depth screening of candidates but may not be as strict as needed as this process is seen as a cost.
Most professionals find compliance requirements complex, leading to increased challenges in adherence. India’s business ecosystem is governed by extensive regulations making timely interpretation crucial. While compliance fosters integrity and accountability complex record-keeping and low awareness create challenges, leading to exhaustion and frustration, which can be described as ‘Compliance Fatigue’.