Building an Anti-Bribery Programme in India: The 2018 PCA Amendments and Corporate Liability

Building an anti-bribery programme in India starts with the 2018 amendments to the Prevention of Corruption Act 1988 (PC Act). Since 26 July 2018, a company can be prosecuted when a person acting on its behalf bribes a public servant, and its main defence is to show it had “adequate procedures” to prevent that. Because the government has not yet prescribed what adequate procedures are, companies have to design programmes against recognised international benchmarks.

This post explains the provisions that create corporate and individual exposure, the guidelines gap, and the components of a programme that a board can defend.

What changed in 2018?

The Prevention of Corruption (Amendment) Act 2018, in force from 26 July 2018, reshaped the Prevention of Corruption Act. Three provisions matter most to companies.

Section 8: giving a bribe is an offence

Section 8 makes it an offence for any person to give or promise an undue advantage to another person intending to induce a public servant to perform a public duty improperly, or to reward such performance. The punishment is imprisonment of up to seven years, or a fine, or both. “Undue advantage” means any gratification other than legal remuneration, and is not limited to money.

A proviso protects a person who was compelled to give the advantage, provided they report the matter to law enforcement within seven days. This narrow coercion defence is important for staff training: it requires prompt reporting, not silence.

Section 9: corporate liability for associated persons

Section 9 is the provision that turned anti-bribery compliance into a board issue. A commercial organisation commits an offence if any person associated with it gives or promises an undue advantage to a public servant intending to obtain or retain business, or an advantage in conducting business, for the organisation. The penalty is a fine.

The organisation's defence is to prove that it had adequate procedures in place, in compliance with guidelines “as may be prescribed”, designed to prevent persons associated with it from such conduct.

Section 10: personal liability of senior officers

Where a s. 9 offence is proved to have been committed with the consent or connivance of a director, manager, secretary or other officer, that individual is also liable, with imprisonment of three to seven years and a fine. This creates a direct personal incentive for leadership to engage with the programme and to act on red flags.

What are “adequate procedures” if no guidelines exist?

As of 2026, the Central Government has not notified the s. 9 guidelines. No notification was found, and professional commentary confirms the gap. This leaves companies in an uncomfortable position: the defence exists, but its content is undefined.

In practice, companies benchmark to two sources:

• The UK Ministry of Justice guidance (2011) issued under s. 9 of the UK Bribery Act 2010, which sets out six principles for adequate procedures.
• ISO 37001, the international standard for anti-bribery management systems.

The Indian provision was clearly modelled on the UK “failure to prevent” approach, which makes the MoJ principles a natural reference point. That does not mean an Indian court must accept them, so it is sensible to document why each element of the programme is proportionate to the company's actual risks.

The six MoJ principles

What should an Indian anti-bribery programme contain?

A programme that maps to these principles typically has the following components.

1. Governance and ownership

The board should approve the anti-bribery policy and receive regular reporting on it. A named senior officer, often the chief compliance officer or general counsel, should have authority, resources and direct access to the audit committee. Under s. 10, a director, manager or other officer who consented to or connived at an offence by the company is personally liable, so a programme that exists only on paper exposes them directly.

2. A bribery risk assessment

Risks in India concentrate in a few areas: licences and approvals, land and construction, customs and logistics, government tenders, tax and regulatory inspections, and public-sector customers. A good assessment maps where the company touches public servants, which intermediaries act for it, and where cash or discretionary spend could fund an undue advantage. It is refreshed when the business enters new markets or sectors.

3. Policies and procedures

Core documents usually include:

• an anti-bribery and anti-corruption policy with a clear prohibition on undue advantages, including facilitation payments;
• rules on gifts, hospitality, travel and sponsorships, with thresholds and pre-approval;
• controls on political and charitable contributions;
• a conflict-of-interest declaration process;
• a clear statement of the s. 8 coercion route, so staff know to report extortion within seven days.

4. Third-party due diligence

Most bribery cases involve intermediaries. Because s. 9 reaches anyone performing services on the company's behalf, agents, consultants, distributors, customs brokers and liaison firms need risk-based checks before onboarding and periodically after. Integrity due diligence on high-risk intermediaries should look at ownership, links to public officials, reputation and the commercial logic of fees. Vendor due diligence and contract clauses giving audit rights and termination for breach complete the picture. Our post on business partner due diligence in India explains what to check.

5. Financial controls

Money for bribes has to come out of the books somewhere, so controls should target the usual channels: inflated or vague consultancy fees, round-sum payments, cash advances, unexplained discounts or rebates, and payments to accounts that do not match the vendor. Journal-entry testing and analytics on high-risk ledgers help, and kickback schemes often show up as pricing anomalies in procurement.

6. Training and communication

Training should be targeted. Sales teams, government-facing staff, procurement and finance need scenario-based sessions; others need a short annual refresher. Records of attendance are part of the evidence that procedures exist.

7. Speak-up and investigation

Employees and third parties must be able to raise concerns safely. For many companies this sits within the statutory vigil mechanism under s. 177 of the Companies Act 2013. Allegations must be investigated promptly and independently, with outcomes recorded. The ACFE's Occupational Fraud 2026 report found that 43% of occupational frauds were detected by tips, and that corruption featured in 45% of the cases studied, which underlines why reporting channels matter. Our guide on how to investigate a whistleblower complaint sets out a step-by-step process.

8. Monitoring, audit and review

Internal audit should test the programme, including gifts registers, third-party files and high-risk payments. Lessons from investigations should feed back into the risk assessment. A programme that never finds anything is more likely to be blind than clean.

What about private-sector bribery?

India has no dedicated offence of bribery between private parties. The PC Act targets public servants, although s. 2(c) defines that term widely, covering, for example, employees of public-sector banks. Private-sector kickbacks are usually pursued as criminal breach of trust, cheating or conspiracy under the Bharatiya Nyaya Sanhita 2023, or under company, tax or anti-money laundering law. A well-designed policy prohibits private-sector bribery anyway, because it is a fraud on the company and creates exposure under foreign laws.

Does foreign law also apply?

For Indian companies with links to the US or UK, foreign anti-bribery laws may apply alongside the PC Act. Our companion post on when the FCPA and UK Bribery Act reach Indian companies explains the jurisdictional hooks. Specific legal advice is needed to assess exposure in any given case.

How Spectra Forensics can help

Spectra Forensics has 19+ years of experience and 1,250+ investigations behind it. Our anti-bribery and corruption service covers bribery risk assessments, programme design and testing against recognised benchmarks. Our integrity due diligence service covers integrity checks on agents and intermediaries, and our fraud and whistleblower investigations cover independent investigation of bribery allegations. To discuss your programme, contact us.