The U.S. Foreign Corrupt Practices Act and Its Applicability to Multinational Corporations in India

Dr. Khalid Khan, Managing Partner | khalid.khan@insightjuris.in

Dated: 1 September 2026

Introduction

The U.S. Foreign Corrupt Practices Act (FCPA), enacted in 1977, is one of the most important anti-corruption laws affecting international business. Its anti-bribery provisions prohibit corrupt payments to foreign officials to obtain or retain business or secure an improper advantage. Its accounting provisions require covered issuers to maintain accurate books and records and adequate internal accounting controls.

For multinational corporations operating in India, the FCPA is not merely a foreign legal issue. It can apply to U.S. companies with Indian operations, foreign companies that are SEC issuers, and, in defined circumstances, non-U.S. companies and individuals whose conduct has a sufficient U.S. nexus. The consequences can include criminal prosecution, civil penalties, disgorgement, reputational damage, and costly investigations.

This article outlines what the FCPA covers, why it matters in India, recent enforcement developments, and the practical steps companies should take to manage risk.

What the FCPA Prohibits

The FCPA has two principal components: anti-bribery rules and accounting rules.

1. Anti-Bribery Provisions

The anti-bribery provisions prohibit covered persons and entities from corruptly offering, promising, authorizing, or providing anything of value to a foreign official, foreign political party, party official, or political candidate to obtain or retain business or secure an improper business advantage.

“Anything of value” is interpreted broadly and may include cash, gifts, travel, hospitality, internships for relatives, charitable contributions, employment opportunities, or other benefits intended to influence an official decision.

The FCPA also prohibits indirect bribery. A company may face liability where it uses an agent, consultant, distributor, or other intermediary while knowing, or consciously disregarding, a substantial risk that the intermediary will make an improper payment.

The statute contains a narrow exception for facilitating payments made to expedite routine, non-discretionary governmental actions. It also provides affirmative defences for payments that are lawful under the written laws of the foreign country and for reasonable, bona fide business expenditures directly related to product promotion or contract performance. In practice, these defences are construed narrowly and should not be treated as routine business exceptions.

2. Accounting Provisions

The accounting provisions apply to issuers, meaning companies with securities registered in the United States or that are required to file reports with the SEC. Foreign private issuers that list securities in the U.S. and file reports with the SEC are included within that category.

Issuers must keep books and records that accurately and fairly reflect transactions and asset dispositions and maintain internal accounting controls that provide reasonable assurance that transactions are properly authorized and recorded.

An inaccurate entry, such as describing a bribe as a consulting fee, marketing expense, or commission, may create books-and-records liability even if an underlying anti-bribery violation is not separately established.

Why It Matters in India

The FCPA can extend beyond U.S. incorporated companies, but the basis for jurisdiction depends on the entity and conduct involved.

Issuers

Any U.S. or foreign company that is an SEC issuer may be subject to the FCPA’s anti-bribery and accounting provisions. This can include an Indian company if it has securities registered in the United States or SEC reporting obligations.

However, merely raising capital from U.S. investors or issuing debt to U.S. purchasers does not, by itself, make an Indian company an FCPA issuer. The key question is whether the company has a registered class of securities in the United States or must file reports with the SEC.

U.S. Persons and Companies

The FCPA applies to U.S. citizens, nationals, residents, and business entities organized under U.S. law. A U.S. parent company can therefore face liability for its own involvement in corrupt conduct connected with an Indian subsidiary, including where it authorizes, directs, controls, or knowingly ignores improper payments.

An Indian subsidiary is not automatically a domestic concern simply because it is owned by a U.S. company. Its conduct can still create exposure for the U.S. parent under agency, control, conspiracy, accounting, or other liability theories.

Other Persons Acting Within U.S. Territory

The FCPA may also apply to foreign companies and foreign nationals that take an act in furtherance of a corrupt payment while in U.S. territory. This is highly fact-specific, and relevant conduct may include use of U.S. bank accounts, meetings in the United States, or communications sent from or through the United States.

Recent India Enforcement Actions

Recent U.S. enforcement activity shows that India remains a significant FCPA risk area, especially where alleged misconduct involves public procurement, state-owned entities, or intermediaries. The recent matters also show that the DOJ and SEC have taken different approaches, with some cases ending in declinations or dismissals and others resulting in settled civil actions.

In November 2024, the DOJ unsealed charges alleging a bribery scheme involving promises to pay Indian government officials to secure solar-energy supply contracts. The case underscored the continuing enforcement focus on infrastructure and energy projects, particularly where government approvals and procurement decisions are involved.

In October 2024, the SEC resolved an action against Moog Inc. involving alleged payments by its Indian subsidiary to officials through third-party agents and distributors in connection with government contracts and tenders. The matter highlighted the recurring enforcement risk posed by third-party intermediaries and government-facing business in India.

In August 2025, the DOJ declined to prosecute Liberty Mutual after a voluntary disclosure concerning alleged improper payments by its Indian subsidiary to officials at state-owned banks. The declination reflected the importance of voluntary disclosure, cooperation, remediation, and the absence of aggravating circumstances in the DOJ’s resolution analysis.

Separate India-related litigation also moved through the courts in 2025 and 2026, including cases tied to alleged bribery involving Indian construction and renewable-energy matters. These developments show that India-related FCPA exposure continues to arise not only in enforcement actions against corporations, but also in proceedings involving executives and individual defendants.

India Risk Areas

India’s scale, public-sector participation in key industries, and frequent reliance on third-party intermediaries make it a recurring anti-corruption risk area for multinational businesses. Higher-risk sectors commonly include infrastructure, energy, defense, telecommunications, healthcare, financial services, customs, and public procurement.

Recent India-related FCPA matters illustrate the risk. Third-party relationships, interactions with government-controlled entities, and public tender processes remain central FCPA risk areas.

Enforcement Landscape

In February 2025, President Trump issued Executive Order 14209, pausing new DOJ FCPA investigations and enforcement actions while the Department of Justice reviewed its approach. In June 2025, the DOJ issued updated FCPA enforcement guidelines.

The updated guidelines state that prosecutors should prioritize conduct that involves cartel or transnational criminal organization activity, causes economic injury to identifiable U.S. persons, threatens U.S. national security, or involves strong indicia of corrupt intent such as substantial bribe payments or sophisticated concealment.

The revised approach may narrow DOJ enforcement priorities, but it does not amend the statute itself. The FCPA remains enforceable, and the SEC retains independent civil enforcement authority. Companies should therefore not assume that reduced DOJ activity eliminates their exposure.

Practical Implications

Third-Party Risk

Companies often rely on agents, distributors, consultants, customs brokers, and joint-venture partners in India. These relationships require risk-based due diligence, written anti-corruption commitments, commercially justified compensation, audit rights, and continuing monitoring.

State-Owned Entities and Public Procurement

Employees of government departments, public-sector undertakings, and state-controlled enterprises may qualify as foreign officials under the FCPA. Whether an entity is a government instrumentality is a fact-dependent legal question, but dealings with state-linked entities should be treated as elevated risk.

Books and Records

Issuers and their controlled subsidiaries should ensure that all payments are accurately documented. Generic or unsupported descriptions such as “miscellaneous expenses,” “marketing support,” or “consulting fees” should receive heightened scrutiny.

Gifts, Travel, Hospitality, and Charitable Contributions

A modest, transparent, and properly documented business courtesy may be permissible. The risk increases where an item is provided to an official with influence over a pending decision, is excessive, lacks a legitimate business purpose, or is routed through a third party.

Mergers, Acquisitions, and Joint Ventures

Acquirers should conduct anti-corruption due diligence before acquiring or partnering with an Indian business. When issues are identified, companies should document remediation, consider timely disclosure where appropriate, and integrate the target into their compliance program promptly after closing.

Indian Law

FCPA exposure may overlap with Indian law, including the Prevention of Corruption Act, 1988, as amended. A single course of conduct can therefore create parallel regulatory, criminal, and reputational consequences.

Compliance Program

An effective program should be proportionate to the company’s business model and risk profile. For operations in India, it should generally include:

• A risk-based anti-corruption policy tailored to local operations.
• Documented screening and monitoring of third-party intermediaries.
• Approval and recording controls for gifts, travel, hospitality, donations, and sponsorships.
• Regular training for sales, procurement, finance, government-affairs, and senior personnel.
• Confidential reporting channels and a credible investigation process.
• Targeted audit procedures for high-risk payments and government-facing activities.
• Coordination among legal, compliance, finance, and internal audit teams.

The DOJ and SEC continue to view voluntary self-disclosure, full cooperation, timely remediation, and effective compliance controls as important considerations in corporate resolutions.

Conclusion

The FCPA can create significant exposure for multinational businesses operating in India, particularly where operations involve public procurement, state-linked entities, third-party intermediaries, or U.S. capital-market connections.

Although U.S. enforcement priorities shifted in 2025, the core compliance message is unchanged: companies should maintain strong third-party controls, accurate books and records, disciplined approval processes, and a practical compliance program tested against real business risks. Preventing misconduct remains far less costly than responding to an investigation, regulatory action, or prosecution.

Disclaimer: This article is intended solely for informational purposes. The opinions expressed are personal to the author and should not be regarded as legal advice or as a legal opinion, whether express or implied.

Nothing in this article is intended to encourage or discourage any particular action. Readers should seek independent legal advice before relying on or acting upon any information discussed herein. The author accepts no responsibility or liability, financial or otherwise, for any consequences arising from reliance on this article.