What are the regulatory steps and disclosure requirements to engage a government relations firm for policy advocacy in India?

As an international firm, we are uniquely positioned to support you not only through remote consultations but also by traveling to India in person should our engagement progress to that stage. This allows us to combine global perspective with local presence, ensuring that your advocacy efforts are both compliant and effective. We can arrange a Zoom meeting to discuss the specific regulatory steps, ongoing compliance requirements, and restrictions related to costs or gifts when interacting with government officials. From there, we will outline a structured plan tailored to your sector and objectives. Please let me know your availability, and I will coordinate the session promptly.

1. Registrations and Disclosures
​There are no mandatory public registrations for hiring a lobbying firm. However, you must manage the following:
​Internal Corporate Disclosures: Under the Companies Act, 2013, any significant payments to third-party consultants must be properly recorded in your financial statements. If you are a listed company, SEBI regulations may require disclosure of "material" agreements that could impact the company’s regulatory environment.
​The "Lobbyist" Label: Most firms in India will describe their services as "Public Policy Advocacy," "Strategic Communications," or "Legal Consultancy." Using these terms in your service level agreements (SLAs) is standard practice to align with the local business environment.
​2. Ongoing Compliance Obligations
​While there are no "quarterly lobbying reports" to the government, you are responsible for ensuring the firm does not violate India's strict anti-bribery laws:
​The Prevention of Corruption Act (PCA), 1988 (Amended 2018): This is the most critical law. It criminalizes not just the taking of a bribe by a public servant, but also the giving of a bribe by a commercial organization. You can be held vicariously liable for the actions of the firm you hire.
​Foreign Contribution Regulation Act (FCRA): If your company has foreign ownership or receives foreign funding, you must ensure that these funds are not used to influence "political" activities or provided to public officials, which is strictly prohibited under FCRA.
​3. Restrictions on Costs and Gifts
​In India, the line between "hospitality" and "bribery" is very thin. The standard for government officials is significantly stricter than for private sector interactions.
​Cash & Gifts: Providing any "undue advantage" (money, gifts, or favors) to a public servant is an offense. Even small gifts that might be considered "customary" in the private sector can be flagged.
​Meals and Hospitality: There is no specific "limit" like the U.S. $20 rule. However, the Central Civil Services (Conduct) Rules generally prohibit government officials from accepting "lavish" hospitality. To stay safe, business meetings should occur in professional settings, and any modest hospitality (like a working lunch) should be documented as a legitimate business expense.
​Facilitation Payments: Often called "grease payments," these are illegal in India. You cannot pay to "speed up" a routine regulatory process.
​4. Best Practices for Engagement
​Since the industry is unregulated, the risk falls entirely on the client. You should:
​Include "Right to Audit" Clauses: Your contract should allow you to audit the firm’s expenses to ensure no funds were used for "illegal gratification."
​Conduct Thorough Due Diligence: Verify the firm's reputation and ensure they have a robust internal code of ethics.
​Political Contributions: Be aware that corporate donations to political parties must be made through transparent channels (like Electoral Bonds or authorized bank transfers) and disclosed in your annual report.