Bolstered by government's moves to attract more foreign investments and changing legal framework, the country's risk management consultancy business is expected to see an annual growth of as much as 30 per cent, experts say.
Instances of corporate frauds as well as sluggish economic conditions are also likely to benefit the risk management consultancy business since entities would seek assistance of such services before deciding on investments, they said.
Hill & Associates India Country Manager Shalini Chakravorty said more FDI in sectors such as retail, and issues related to business laws, among others, would necessitate the need for risk management.
The business of risk management consultancies are expected to grow at a "rate of 20-30 per cent a year", she told PTI.
Entities would be looking for risk management both for financial and non-financial areas, she added.
Headquartered in Hong Kong, Hill & Associates is an independent security and risk management consultancy firm.
Going by estimates, global risk management consultancy business is worth about USD 30 billion and currently, India accounts for about three to four per cent share.
Experts opined that opening up of retail sector for more FDI is expected to result in increased demand for risk management consultancy, since many overseas players would be interested in knowing about opportunities in the country.
"We should see exponential growth in the revenues of risk consultants... We are talking of a 40 -50 per cent CAGR for the next decade," risk management expert Deepak Wadhawan said.
Moreover, various laws are changing and new things such as Direct Taxes Code and Goods & Services Tax are on the anvil. So, companies need to understand the legal framework better and that would mean managing risks, experts said.
Not just overseas companies, domestic entities too are seeking the services of risk management consultancies for various needs including employee background checks.
In the last 12-18 months, more number of smaller businesses have started seeking professional risk advice, Wadhawan said.
A detailed risk assessment with various inputs, including crime statistics, needs to be done by companies before setting up a business, Chakravorty said.
"The retail business will in the coming years move from an unorganised to organised retail. The complete ecosystem is not geared to organised retail. Any transition phase has large number of uncertainties and risks," Wadhawan said.
Details for business travellers, possible security issues and local risk assessment, are many times sought by companies.