India drops 5 places on the 2021 Business Bribery Risk Rankings

There is a 44 % risk of bribery demand in business transactions in India, as per the latest report from TRACE, a US-based business association dedicated to anti-bribery, compliance, and good governance. The annually published Bribery Risk Matrix (TRACE Matrix) based on aggregated data from UN, World Bank, V-Dem, and World Economic Forum, measures business bribery risk in 194 countries. Their findings help commercial businesses to identify considerations for managing bribery risk in the markets where they operate.

India's overall score on the TRACE Bribery Risk Matrix 2021 improved marginally by 1 point - from 45 in 2020 to 44 in 2021. The score is calculated on a scale of 100, denoting a 44% likelihood of bribery in business transactions in India. India dropped 5 spots on the overall ranking and was placed 82^nd amongst 194 countries in 2021 in comparison to the 77th position a year ago.

India fared better than its neighbors – China, Pakistan, Nepal, and Bangladesh. However, it fared lower than some of its G20 peers such as the UK and Australia where the business bribery risk in 2021 was 14% and 16% respectively.

TRACE’s 2021 Bribery Risk Matrix, mentioned that over the past 10 years, the business bribery risk environment worsened significantly in countries that also experienced democratic backsliding: Egypt, Venezuela, Turkey, Poland, and Hungary. Denmark maintained its pole position on the 2021 list for the second year in a row with an overall business risk of only 2%.

The overall country risk score is a combined and weighted score of four domains - Opportunity, Deterrence, Transparency, and Oversight.

• The Opportunity domain measures interactions between businesses and government and carries a 40% weightage in the overall Business Bribery Risk India scored 47/100, denoting a 47% likelihood of bribery in business interactions between businesses and government.
• India scored 52/100 in the Deterrence domain which describes the informal and formal mechanisms that deter businesses or government officials from engaging in bribery.
• India scored only 36 out of 100 in the Transparency domain which assesses the transparency in the government’s regulatory functions and processes, and financial transparency within the government and government-adjacent institutions.
• The capacity for Civil Society Oversight domain examines the freedom and strength of the press and civil society in acting as a check on corruption in the public sector. India's score in this domain increased from 40 in 2020 to 43 in 2021. Govt. and Civil Service Transparency continues to be a weak corner weighing heavily on the overall Business Bribery Risk score.