R. Suryamurthy
Indian companies have made gains in managing risks despite persistent global and domestic uncertainties, according to the 2024 ICICI Lombard Corporate India Risk Index (IL CIRI). The fifth edition of the report, produced in collaboration with Frost & Sullivan, showed the overall Corporate India Risk Index rose to 65 in 2024, up from 64 in 2023.
The report also noted the Risk Management Index increased from 67 to 68, indicating a shift towards more strategic and resilient risk management frameworks. However, the Corporate India Risk Exposure Index remained at 65, unchanged from the previous year, suggesting that while risk management is improving, companies continue to face significant risk.
Sandeep Goradia, Chief Corporate Solutions, International, Bancassurance at ICICI Lombard, emphasizes this shift: “This year’s findings clearly show that Indian companies are no longer reacting to risk—they are managing their risks better. This progress is evident in the improvement showcased by corporate India Risk Index. This upward trend, despite increasing challenges demonstrate a proactive shift towards stronger risk mitigation frameworks. We are seeing a shift toward long-term resilience, where AI, sustainability and digital agility are now foundational to corporate strategy. At ICICI Lombard, we believe effective risk governance is not just a compliance exercise- it is an enabler of sustained growth.”
The report highlights that nine sectors achieved ‘Superior Risk Index’ status in 2024, demonstrating robust risk management practices. These leading sectors include:
Pharmaceuticals: Continues to strengthen global supply chain resilience and regulatory compliance.
Healthcare Delivery: Shows increased adoption of telemedicine and AI-driven diagnostics, improving healthcare access and efficiency.
BFSI: Has made significant investments in digital transformation and AI for fraud detection and compliance.
Manufacturing: Benefits from initiatives like “Make in India” and “Atmanirbhar Bharat,” with a growing focus on EV manufacturing and technology adoption.
However, the report also identifies sectors facing increased challenges:
Telecom: Experienced a downgrade in its risk profile due to rising spectrum costs, regulatory scrutiny, and 5G infrastructure demands.
New Age: Startups face reduced venture capital funding and a shift in focus towards profitability over growth.
The proliferation of Artificial Intelligence (AI) is a dominant theme in the IL CIRI 2024. AI is being leveraged across sectors for predictive analytics, automation, and enhanced decision-making. For example, the BFSI sector is utilizing AI to enhance fraud detection and compliance. However, the report also emphasizes the emerging risks associated with AI, including data privacy concerns, cybersecurity threats, and ethical considerations.
The report underscores that India Inc. faces a complex risk environment. Geopolitical tensions, economic volatility, and supply chain disruptions remain significant concerns. Specifically, the ongoing Israel-Palestine conflict and recession fears in major economies have contributed to instability. Furthermore, domestic factors, such as national elections, can introduce policy uncertainty.
To navigate these challenges, the report suggests several key imperatives:
Enhanced Risk Governance: Emphasizing proactive risk identification and mitigation.
Digital Resilience: Investing in cybersecurity and data protection to address the risks associated with increasing digitalization.
Sustainability: Adopting sustainable practices to mitigate environmental risks and ensure long-term viability.
Agility and Adaptability: Building organizational agility to respond effectively to unforeseen disruptions.
Aroop Zutshi, Global President and Managing Partner at Frost & Sullivan, highlights the need for this evolution: “The evolution of India’s risk culture is not just visible — it is transformative. We are seeing a decisive shift from reactive risk management to proactive risk intelligence, where anticipation, agility, and strategic foresight are now core to business resilience. Sectors such as Pharmaceuticals, BFSI, and Manufacturing are leading this transition, embedding risk thinking at the boardroom level and redefining resilience as a source of competitive advantage for India Inc.”
Analysts said while India Inc. has demonstrated notable progress in strengthening its risk management practices, continuous vigilance and adaptation are essential. The ability to navigate emerging risks, leverage technological advancements responsibly, and prioritize sustainability will be critical for sustained economic growth and global competitiveness.