Business risks

Australian companies are advised to spend time investigating the market, obtain professional advice where appropriate and thoroughly investigate the issues in entering the market and before establishing business relationships.

Australian firms wishing to operate in this country should commit to the highest level of corporate behaviour and familiarise themselves with Australia's laws and penalties pertaining to bribery of foreign officials.

Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. Further information on the regulations governing bribery of foreign public officials is available.

For further information on frauds, scams, personal and asset security, intellectual property protection and other business risks please read more about legal issues.

Intellectual Property Protection

Generally, leading Indian corporations are respectful of Intellectual Property (IP) Rights. India is ranked 59th out of 97 countries for IP rights protection in the International Property Rights Index 2016. India has been a World Trade Organization (WTO) member since 1995 and as per the charter WTO member nations must include IP protection in their national laws. Australian companies doing business in India are likely to find similarities between Indian and Australian IP law and enforcement procedures.

India is also a signatory to the following international IP agreements:

  • The Paris Convention: any individual from a signatory state can apply for a patent or trademark in any other signatory state and will be given the same enforcement rights and status as a national of that country where registration is being sought.
  • The Berne Convention: under this, each member state recognises the copyright of authors from other member states in the same way as the copyright of its own nationals.
  • The Patent Cooperation Treaty: this is a central system for obtaining a ‘bundle’ of national patent applications in different jurisdictions through a single application.
  • The Madrid Protocol: this allows a bundle of national trademark registrations in different jurisdictions to be made through a single application. This was acceded to by India in April 2013 and put into effect from July 8, 2013.

India is not yet a signatory to the Hague Agreement, which allows the protection of designs in multiple countries through a single filing.

For further information download Austrade's Doing business in India: Intellectual property rights (PDF, 241KB).

Bribery and corruption

Politicians, bureaucrats and law enforcement officials often wield significant discretionary power and notable abuses have been brought to light. Several high-profile prosecutions in recent years have demonstrated that the legal framework for fighting corruption exists, although enforcement is often weak and responses vary from state to state. In India, corruption is often cited as a barrier to the effective development of the private sector. Procurement practices lack transparency and are coupled with a significant bureaucratic burden. According to the business community, regulations are frequently changed without prior consultation or communication and their application can be inconsistent and non-transparent.

Facilitation payments also known as ‘speed money’ are a common practice in India for obtaining licences, permits, sanctions, approvals, infrastructure and facilities from government departments and agencies. In some instances, third parties are used by businesses in order to avoid exposing their companies to direct involvement in negotiating bribes with government officials.

This business environment poses risks that require proactive management in the form of regular due diligence reviews. The development of risk management strategies are needed to successfully navigate through these challenges and capture the significant opportunities in the Indian market.

For further information download Austrade's Doing business in India: Managing business risks - bribery and corruption (PDF, 231KB).