Mumbai: In light of the recent terror attack, Mumbai can expect a short-term setback in investments, but once it recovers, so could the foreign interest.
Fellow, Royal Institute for International Affairs Marie Lall says, "For the first few months there is going to be a reduction probably in investments. Largely this is the case when there is any kind of attack anywhere, if you remember the 7/7 attacks here in London, which happened in July, you found after these attacks there was a reduction of tourism, there was a reduction of investment, it lasted a couple of months, but things picked up again. It will be the same in India, but let's not forget that there's a global credit crunch as well, so there isn't an awful lot of money, it's the end of the year, things are slowing down towards December, so it will take some time for Mumbai to recover, but there's no question, with the kind of growth India has had, in a couple of months people won't be thinking about those attacks any more, and unless there's a conflict between India and Pakistan, which will make the country inherently unstable, the investments will come back."
Terrorism expert Bob Ayers says, "We've seen terror strikes in London, Madrid, France, Bali, and in all of these locations no one has suggested that financial inward investments should be terminated, it's too high risk to do so. The people who are making investments in places like India, they will do a risk assessment like anywhere else, and they will come to the conclusion that there's no place in the world that can't be targeted like this, so they will go back into doing the economically driven investments they have always done."
But the attack was undoubtedly a blow to the markets as well, and the Indian market will have to make an effort to look attractive again.
Director of the International Centre for the Study of Radicalisation and Political Violence Peter Neumann says, “It can have profound consequences for a hugely successful economy like India which is just on the verge of breaking through. And if this attack were to lead to western businesses permanently withdrawing from India, this would be terrible for the Indian economy, I think it is important to emphasise to western audiences that just because this one attack happened, this hasn't changed any fundamentals about the Indian economy or about the viability and vitality of Indian democracy."
"If finance and investment were to be put off by terror attacks, there just might be few places left in the world for it to turn to.
The bigger, if less visible threat, is the financial crisis, and there are many in the world who believe India will get past both."
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