Economic slowdown, market disruptions specific to India’s business environment and sustained inflation have emerged as the top risk factors in the latest FICCI-EY risk survey with 68% of the respondents highlighting them as the biggest threat to their organisations’ performance.
Navigating Economic Volatility
While economic volatility has been rated as the second biggest risk area — with 67% respondents registering their concern, the survey showed that geopolitical tensions, fuelled by increased nationalism and trade wars, are creating noticable impact on the organisations, contributing to uncertainty in decision-making and long-term outlook.
“These findings reinforce the need for boards to embed geopolitical foresight, prioritise resilience over efficiency and align capital allocation with a fragmented, unpredictable global landscape,” the survey said.
Broadly, the executives participating in the survey has pointed out 8 key risk factors affecting their organisation’s performance.
AI and Cyber Security
Artificial intelligence (AI), for instance, is emerging as a defining challenge requiring thoughtful oversight by senior leaders. The survey noted that AI can introduce inherent risks, including hallucinations that produce confident but incorrect outputs, bias embedded in training data, and weak explainability and
poor data quality, all of which can undermine decision accuracy and accountability. “These risks are no longer theoretical. As reliance on AI
grows, failures such as model drift (where AI accuracy declines as data patterns change over time) and data poisoning (where incorrect or manipulated data affects forecasting errors, inventory disruptions and productivity losses) are becoming increasingly common,” it said.
The survey indicates that cyber attacks and data breaches are a growing concern with 61% of respondents strongly agreeing that cyber attacks pose major threats.
“India faces a sharp rise in cyber intrusions due to AI-based social engineering, cloud gaps (weak cloud security settings), and vulnerability chaining (attackers linking multiple small security flaws to gain deeper access into
networks). Deepfake voice scams affect the banking sector, leading to losses from fraud and higher complaint volumes on the National Cyber-Crime Reporting Portal (NCRP),” the survey stated.
Moreover, the respondents said that changes in data protection rules, New Labour Codes, tax administration, competition law and sector-specific regulations, the regulatory and governance risks are growing at a fast clip.
“Weak governance structures, limited
board engagement, or poor visibility over vendors and contractors heighten exposure to regulatory action and reputational damage. For listed companies, specifically in regulated sectors, governance lapses can affect investor confidence and access to capital'” the survey said.
EY-FICCI gathered responses from 137 leading decision makers in the corporate India for its report.