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India's Growing Security Industry

THE MUMBAI ATTACKS, in which terrorists struck soft targets throughout India’s financial capital, focused the world’s attention on the country’s private security officer sector.

India currently has approximately 5.5 million security guards employed by about 15,000 security companies; as an industry, this sector is now the country’s largest corporate taxpayer, according to Col. Jagat Trikha, executive director of the Central Association of Private Security Industry (CAPSI).

It is likely to continue to grow. Even before the attack last year, the industry was experiencing an annual growth rate of 25 percent due primarily to the country’s infrastructure development, Trikha says. The association now estimates an annual growth rate of 40 percent.

But in many ways, this industry is still in its infancy.

Capt. Percy Jokhi, CPP, head of security and vigilance at First Source Solutions Ltd. in Mumbai, compared the private security industry in India to the same industry in the United States 40 years ago, saying that the average security guard in this country is often underscreened, undertrained, undersupervised, and underpaid, just as was reported to be the case in the U.S. in a 1971 RAND Corp. study.

Despite increased investment, private security’s end users have not yet seen a change in the quality of officers, Jokhi says, “though we have expressed a desire as clients to see a better-trained work force.” Jokhi acknowledges that there has been some progress, “but it will probably take a little time for us to feel the results,” he says.

India’s Private Security Agencies Regulation Act, 2005 (PSAR), was created to improve private security standards in the country by issuing licenses to security companies. It also sets minimum standards for security guards, such as 160 hours of training before deployment. CAPSI advises that providers view PSAR as a floor, not a ceiling, however. It recommends that security companies train guards for two months before deployment.

The law also requires that owners and major shareholders of private security companies in the country be citizens of India. But it does not prevent outside firms from entering into business relationships with local firms.

Partnerships are being formed between local providers and those located in Israel, Europe, and the United States. This is one positive development, Jokhi notes. APS Group of India, for example, recently formed a joint venture with ARES Group of Israel; the Israeli firm will provide advanced security training and consultancy services to its local partner.

Also, the Israeli Military Institute now offers training courses for Indian security executives, which could improve the quality of the security industry, Jokhi says.

Similarly, American consulting companies like AFI International are responding to the changed environment by offering to provide training to the third-party private security forces of its clients. AFI starts by conducting an audit, says Peter Martin, the company’s president. It then works with the company to address areas of weakness in terms of officer training and protocols. Multinational companies try to maintain the culture of the area in which they operate, Martin says, but that hasn’t worked in “areas that have a very lax or untrained security force or view of security like in India.”

More rigorous training is needed as well. Fitness, firefighting, and reading and writing in English are some of the areas guards are currently trained in, Jokhi says.

Security in India is also inconsistent from state to state, because some have not yet adopted the PSAR. Under India’s legal regimen, each state must pass the PSAR in its legislature and then set up a controlling authority. Experts say the PSAR has been implemented in only 10 of India’s 28 states. Implementation in many other states has been delayed by efforts of business groups opposed to regulation, says Jokhi.

Ramesh Iyer, executive director of TOPSGRUP, a large private security company in India, says that the security situation in the country will prompt states that have not yet passed the act to do so. He notes that in addition to the 10 states that are currently issuing licenses to companies through the PSAR, three more are expected to begin issuing licenses any time. Trikha also expects that the act will eventually be widely adopted.

Adding to the confusion, some states in India have their own regulations for the security industry as also happens in the United States. For example, Maharashtra, the state in which Mumbai is located, has the Maharashtra Security Guard Board (MSGB), which was created in 1981. The MSGB primarily regulates the welfare of the guards (by setting a minimum wage, for example) rather than regulating for security. It is not yet clear, Iyer says, whether the PSAR will take precedence over the MSGB or vice versa.

TOPSGRUP and the other service providers in Maharashtra have filed a petition in court, challenging the MSGB, Iyer says. Complicating issues still further, the MSGB also provides security guards to companies, in addition to being a regulatory body.

In the aftermath of the Mumbai terror attacks, some in the industry are also pushing for the government to grant licenses for private security guards to carry weapons. Currently, most security guards in the country are unarmed.

The few armed guards in the country are individuals who have been granted an arms license and have their own weapon. Many of these security personnel are ex-servicemen. According to Trikha and media reports, however, the government is considering granting corporate weapon licenses to private security companies, which would own the weapons and be responsible for securing them.