Sourcebase Reports

Country briefing exerts and analysis from KCS Group

India’s economic growth fuels cyber crime

While China’s financial meltdown may boost inward investment into India, a growing economy is set to bring with it a rapid rise in cyber crime.

Recently elected prime minister Narenda Modi is facing protests at home while bearing criticism for his hard-line and bellicose Pakistan policy. But Modi must lso contend with recent waves created by the falling Chinese stock market and broader international slowdown.

The status of countries like India as the ‘next big thing’, with massive populations and emerging middle-classes, yet without the housing and stock market bubbles currently throwing China into turmoil, could make them a very attractive target for FDI and economic development.

India is already seeing high-profile investments from international majors, as well as a reinvigorated private equity (PE) market. Amazon, for instance, has recently celebrated its success in the country, with massive 500% year-on-year growth in units shipped since starting operations just two years ago and is planning to invest a further US$2 billion. The controversial but rapidly expanding car-sharing firm Uber is also investing another US$1 billion developing its Indian operations.

Recent reports also say the India’s investment cycle is heating up, with infrastructure being a particular strength. The government is currently leading this investment recovery, but private firms are strengthening as they overcome hurdles such as a weak banking sector and difficult regulatory environment. India Value Fund Advisors (IVFA), for instance, has just announced a US$700 million new India-focused fund.

But a rising tide of cyber crime could soon extinguish much of India’s nascent economic growth. There is growing evidence that, in addition to the organised criminal gangs (OCGs), India may also be the target of cyber warfare. A few days ago, US security company FireEye announced that it has discovered a hacking campaign against Indian interests, primarily focused on espionage and border issues with Bangladesh, Nepal, and Pakistan. The firm claimed that the attacks likely originated from China, a trend that, if it continues, could push India and the US (which is also frequently targeted by reported Chinese hackers) even closer together.

Although ties with the US technology industry and government are deepening and a ‘Cyber Dialogue’ event was held in the US in mid-August, india’s cyber security spend is US$7.76 million compared to US$4.7 billion spent by the US in 2013. Some reports suggest that India will be short by some 1million cyber security professionals by 2020.

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Tony Glover
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This entry was posted on September 7, 2015 by in Uncategorized.
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