Terrorist attacks in Mumbai should not affect investment to India

By Michael Cooney, NetworkWorld.com, 07/12/06

My colleagues at the IDG New Service write today that the terrorist attacks Tuesday on trains in the western India city of Mumbai appeared unlikely to dampen investments and outsourcing to India, which has weathered such tragedy before with resilience.

Investors are not naive and have factored in the political, economic, and other risks involved before investing in India, said Sanjay Anandaram, a partner at JumpStartUp Venture Fund, a US$45 million fund with headquarters in Mauritius.

Bombs that exploded in trains at eight locations in Mumbai Tuesday killed over 190 people and injured 700. The Indian government suspects separatist Kashmiri Muslim groups that are demanding independence for the part of Kashmir currently under Indian control. The other part of Kashmir is controlled by Pakistan.

The separatist groups are believed by the Indian government to be responsible for a number of terrorist attacks in India, including one in December at the Indian Institute of Science in Bangalore, one of the country's top most educational institutions. The government also found evidence from terrorists killed in an encounter last year that they were targeting India's successful outsourcing industry.

Despite initial fears of a stock market slump after the blasts, the 30-share index of the Bombay Stock Exchange in Mumbai was up by 3 percent at its close Wednesday, to 10,930, mainly on buying in tech stocks after India's second largest outsourcer, Infosys Technologies Ltd., forecast strong growth for its current fiscal year. For omore on this story, click here.

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