Indian Firms Shift to Proactive Compliance

Indian businesses are increasingly integrating compliance into their core strategies, transforming from reactive approaches to proactive vigilance. This shift is driven by escalating regulatory complexity, mandatory reporting, and the significant risk of penalties, which now dictate market access and competitiveness.

Tata Steel, with operations across India, the UK, EU, and Canada, recently highlighted these regulatory impacts. The company absorbed €150 million in carbon emission costs and €50 million from US tariffs in its Netherlands operations. This demonstrates how policy significantly weighs on profitability, as these costs reduced potential operating profit.

Smaller companies like Jyoti Steel Industries also face similar challenges. The rapid evolution of rules often necessitates reliance on customer intelligence for navigation. For instance, a customer revealed Japanese steel was cheaper than Indian steel due to trade arrangements, underscoring the critical need to understand and incorporate regulations into daily business.

Legal experts describe this era as 'regulated strategy,' where compliance is a survival metric. Boards are prioritizing preventive vigilance, embedding regulatory considerations into product design and supply chains. This elevated focus means non-compliance can expose directors to strict liability, including civil and criminal penalties.