Will Business Suffer Due to India's Terrorist Attacks?

Ann All

I feel more than a little awful about skimming over the more tragic human elements of this week's terrorist attacks in Mumbai to focus on the possible business impact, but that's my job, and I am not alone.

 

Both Computerworld and ComputerWeekly.com published short stories featuring comments from some of the technology companies with a significant business presence in India. There are few tech companies that don't have operations there. The U.S. has had an increasingly tight business relationship with India for the better part of the last decade.

 

Politics and other national issues can certainly affect this relationship. For instance, stock prices of Indian outsourcing companies dipped after President-elect Barack Obama made remarks perceived as unfriendly to outsourcing during the U.S. presidential campaign.

 

Though the Washington Post reported that at least eight foreigners were among at least 120 killed during attacks on Wednesday and Thursday after terrorists targeted luxury hotels and other locations popular with foreign business people and tourists, none of the sources interviewed by Computerworld believed the attacks would have a lasting impact on their companies' activities in India.

 

While a Dell spokeswoman said security had been tightened at its facilities in India and the company had issued a travel advisory to staff, there was apparently no more dramatic reaction, such as withdrawing staff. Said Vidya Natampally, director of strategy at Microsoft Research India:

The terrorist attacks will not change Microsoft Research's plans in India. We are committed to staying on in India.

Nonetheless, as ComputerWeekly.com reports, the UK's Foreign Office is warning of a "high threat of terrorism throughout India," notably attacks targeting foreigners in large cities such as Delhi and Bangalore.

 

Not all reports downplay the negative impact of this week's violence. Though the business community has been targeted in earlier attacks, notes Forbes, India's financial markets are already suffering due to concerns over the global economic downturn. The latest attacks may further spook foreign investors. Said Nigel Rendell, emerging market strategist at RBC Capital Markets in London:

The impact on confidence will be quite significant. It's going to deter business and make everyone less willing to visit India, whether it's on vacation or for business. A basic assumption about investing is that you have to have law and order.


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