26/ 11 : its
Is India really
affected by it?
Aftab Dewani 39
Ankur Kalani 42
Azim Samnani 44
Sanif Momin 43
Siddharth Gandhi 40
e would like to express our profound gratitude to
our project guide Prof .Manasi, who has so ably
guided our research project with his vast fund of
knowledge, advice and constant encouragement,
which made us, think past the difficulties and lead us to
successful completion of the project.
We have tried to cover all the aspects of the project
& every care has been taken to make the project faultless. We
have tried to write the project in our words as far as possible
and simplified all the concepts by presenting it in a different
We’ll be looking forward in future for such type of
project. We are eagerly waiting for fruitful comments &
Mumbai attack and its aftermath ...................................................................5
26/11 a deliberate plan to hit Indian economy ............................................. 10
The Impact of 26/11 on the Indian Economy ............................................... 13
26/11 and after effects on tourism in India ................................................... 17
Mumbai Terror Attacks ............................................................................ 18
Tourism Industry ...................................................................................... 18
Terror Tourism! ........................................................................................ 19
Terrorist Attacks Will Further Weaken a Slowing Indian Economy ......... 21
Political Fallout .........................................................................................22
Global Implications ................................................................................. 24
Gloom and Doom ..................................................................................... 25
Impact on Industries ................................................................................30
TERRORISM IS HOLDING BACK INDIAN ECONOMY ............................34
A] SHORT-TERM IMPACT ...................................................................... 35
1) Loss of Human Capital .................................................................... 35
2) Investor Behavior............................................................................. 35
3) Short Term Financial Loss .............................................................. 35
4) Retrenchment effect on Specific Industries ..................................36
B) LONG-TERM IMPACT ........................................................................36
1) Political Instability ...........................................................................36
2) Global Implications ......................................................................... 37
3) Long Term Financial Loss ............................................................... 37
Post 26/11, India turns to Russia for small weapons ....................................38
Post-26/11, US more committed for biz with India .................................... 42
Security market soars after Mumbai attacks .............................................. 44
Stepping up security ................................................................................ 45
Investors worry about another attack after Mumbai ................................. 49
STOCKS RESILIENT? ............................................................................... 51
India faces growing Chinese hostility after 26/11 ......................................... 53
US-China relationship ............................................................................. 54
Mumbai attacks costs insurers Rs 500 crore: IRDA .................................... 57
Terror cover premium hiked by 30% .......................................................... 58
Conclusion ..................................................................................................... 61
Bibliography .................................................................................................. 62
Mumbai attack and its aftermath
he recent terrorist
attack on Mumbai is
being called India's 9/11.
In sheer audacity of
design, that is true. The US,
whose mainland has never
been attacked, could not have
imagined that a set of planes
could be transformed into
enormous bombs. Nobody in
India thought of a sea-borne
invasion of Mumbai- the
attackers are said to have
hijacked a fishing trawler,
steered it towards the Mumbai
coast and then landed on
motorised dinghies. Not just
out-of-the box thinking but
meticulous execution has been
in evident in both the cases.
The Taj burning as a result of a series of blasts inside the building
In 9/11, the attackers targeted the World Trade Center, beloved symbol of
America's financial capital. In the
Mumbai attack, the targets were
two high-profile hotels and a Jewish
centre in India's financial capital.
The objective was the same: to
cause dislocation and mayhem in
leading financial centers in ways
that would capture the world's
attention. Smoke billowing out of
the WTC is one image that is
etched in our minds; so will that of
the Taj Hotel in flames. The
Mumbai attackers have certainly
met their objective.
9/11 changed America.
Unilateralism and the doctrine of
9/11 changed America. pre-emption became central to
American foreign policy. There was
the bombing of Afghanistan and invasion of Iraq thereafter. Also less noticed
transgressions of international law such as a missile attack on Sudan, the bombing
of a suspected nuclear site in Syria and missile and bomb attacks on terrorist
hideouts in Pakistan.
The US has made clear that it will not be bound by the UN or
international law when it comes to the protection of its interests. The US has also
gone after terrorists in several countries and spirited them to other locations for
interrogation and incarceration. It did this in Italy a few years ago- an Imam was
seized by CIA operatives. An Italian judge has issued arrest warrants for the CIA
operatives, a warrant that has no chance of being enforced.
Within the US, the full financial might and technological capability of
the country has been brought to bear on preventing infiltration of terrorists. The
issue of visas has become more stringent, there is far greater scrutiny of visitors
(including strip searches) at airports, stepped up surveillance at home and abroad
and an abridgement of civil liberties under the Patriot Act. These have ensured
that no terrorist attack has occurred in the US after 9/11.
There have been comparable measures in the UK after its own 7/11.
Surveillance through closed circuit TV is so pervasive that the Orwellian
prediction of 1984 seems to have come true in the UK. On top of this, tapping of
phone calls and monitoring of email has been stepped up- the American journalist
Seymour Hersh has said that he would never use pay phone in the UK because
there was little chance of the call being confidential.
One other country that has had success in the war of terror- in the
sense of limiting attacks on its soil- is Israel. But Israel is unique. Not only can it
pour huge financial and technological resources towards securing itself, it is
willing to use the most draconian methods. A whole wall has been created
between Israel and the occupied territories and entry through it into Israel tightly
regulated. Palestinians have been beaten into quiescence in the most brutal ways.
Above all; there is the intense determination of the Israeli people, military
conscription for all young people and the fact that Israel is a small country.
Where does India stand after the Mumbai attack? One, there is no
question that security measures in key places, including hotels, will be at a higher
level hereafter, causing no small inconvenience but that is something that people
will come to accept.
Two, it's hard to see how the pressure to enact tougher terror laws can
be resisted- even PM Manmohan Singh had to mention this in his address to the
nation after the attack. This does mean a certain curtailment of civil liberties.
Three, there will be profiling of communities and a crackdown on
suspects within these. These will create more alienation and hence a greater
susceptibility to domestic terrorism.
Will terrorism decline in India in response to strong-arm measures as
happened in the US and Israel? One must be sceptical. We do not have
comparable funds or technology but that is not the only problem. We must reckon
with the country's size and diversity. Above all, there is the problem of corruption
and poor governance.
Key institutions of the state, notably the police and the judiciary,
suffer from both corruption and poor governance. Strong anti-terror laws, in such
a situation, will simply become weapons for persecution and extortion.
Vulnerability to terrorism, it is worth pointing out, is an aspect of
corruption and an indifference to the rule of law. The political class will not
prosecute or pursue high-profile cases of terrorism; businessmen will maintain
links with the underworld; the police is more concerned with collecting bribes
than with maintaining law and order; the media has no qualms about lionising
celebrities who have been convicted in important cases. When a political party
moots the idea of giving a Lok Sabha seat to the key suspect in the Malegaon case,
which is confirmation that India in many ways has the traits of a banana republic.
Without an overhaul of governance, without greater accountability, it
is hard to see how terrorism can be fought effectively. It is the democratic process
and the rule of law that need to be strengthened for these to happen.
Unfortunately, the knee-jerk reaction to heightened terrorism is in
the opposite direction- the abridgement of liberties, greater powers to the police,
contempt for politicians and the political process. On TV, I saw a bunch of ad-men
pouring scorn on politicians and asking them to keep their hands off the law-
enforcement machinery. That is a prescription for fascism.
The gloomy conclusion that emerges is that India will try to emulate
the tough methods adopted by countries such as the US and Israel without having
the commensurate governance or enforcement capability. This can only lead on to
a downward spiral where terrorism is concerned.
26/11 a deliberate plan to hit Indian economy
Remembering the Martyrs
Hours before Islamabad publicly admitted to terror emanating from
its soil, President Pratibha Patil said here on Thursday that India expected
Pakistan to take “decisive and credible action” against all terror groups operating
from its territory.
In her customary address to a joint sitting of Parliament, Patil called
the attack in Mumbai as a deliberate plan to retard India's economic progress and
pointed that terrorists from Pakistan have continued to attack India despite
solemn commitments made by Islamabad that it will not allow its territory to be
used against India in any manner.
In her more than hour-long address, the President also touched upon
the global economic downturn but expressed confidence that the Indian economy
would grow at a relatively high pace of 7.1% in the current financial year.
Recounting the record of the government in the last nearly five years,
Patil said looking back, we see hope. We have not
only withstood the challenges but also emerged stronger.
Cautioning that the nation faced multiple internal security challenges,
the President said the country witnessed terrorist attacks in several cities with
growing levels of sophistication and assistance from outside the country. “Several
innocent lives have been lost. The terrorist attacks in Mumbai as well as the
terrorist incidents in Delhi, Ahmedabad, Hyderabad, Jaipur, Bengaluru and Assam
and before that on our embassy in Kabul were an assault on all the values that our
country stands for,” she said.
Asserting that one of the landmarks achieved by the government was
the signing of Indo-US nuclear deal, she said that India now looked forward to
working with the new Obama administration to the mutual benefit. Touching on
economy, the President said government’s policies have ensured that even as India
faces an economic slowdown along with rest of the world, its fundamentals are
The President said India’s domestic demand could inject fresh
momentum to the economy while the Indian banks were well capitalised and faced
no threat that many of their counterparts faced in other parts of the world.
Referring to the economic stimulus measures taken by the government, Patil
expressed confidence that they will drive the demand for goods and services,
reviving production activities in the manufacturing as well as services sectors.
Even in the prevailing adverse global economic environment, she
hoped the Indian economy would still register a relatively high growth rate. The
President said the sharp increase in global commodity prices, especially those of
petroleum and food, have an adverse impact on the economy....
The Impact of 26/11 on the Indian Economy
Before analyzing the impact of the Mumbai terror attacks on India’s
economy, we must understand how 26/11 was different from any other terror
attack on the country.
God Helps Those Who Help Themselves
1. There is no denying that the attacks were the most audacious of its kind ever
in India. But this assessment of the tragedy is based more on the way it was
executed, than on the actual number of victims it claimed.
2. If you jog your memory back to the serial bomb blasts in Mumbai, 1993, where
about 250 people were killed, you will realize that the city has witnessed
tragedies of this magnitude before.
3. However, the attacks were unique, in a rather dubious way, as it was perhaps
the first instance where a small group of highly motivated terrorists held an
entire nation and its defence forces to ransom for over three days.
4. Coming at a time when the world was experiencing economic turbulence, it
triggered fears that the Indian economy would be adversely affected.
The last point is of particular significance in these difficult times. Should an
atrocity like 26/11 essentially have a negative impact on the economy? As it turns
out, this is not the case.
The impact could have been termed negative, had the following cases been true:
1. First Case: There was heavy foreign investment in India in the months before
2. Second Case: Foreign investment showed a dramatic decline following the
Let us examine the first case:
1. The first case is certainly not true. In the wake of the global economic crisis,
foreign institutional investors (FIIs) were tripping over each other in their hurry
to pull money out from the Indian markets in the months before the terrorist
2. In the process, they pulled the rug from under the feet of the sensex, sending it
crashing nearly 12,000 points in eleven months.
Let us now examine the second case:
1. Even as the attacks were unfolding in Mumbai, the markets were witnessing
something totally unexpected. Instead of a massive outflow of funds from the
Indian markets, money was actually flowing in. So, the second case is also not
As you can see, the impact was actually favourable. But how did this
miracle happen? As S.A.Aiyar points out in his column in the Times of India, the
answer is fairly simple. The FIIs saw a big opportunity to buy shares and invest in
equities when the market was low. When the markets reopened a couple of days
later, the sensex actually registered a gain. It has kept up this trend ever since.
The events worked in India’s favour in other ways too. US
intervention has forced Pakistan to crack down on terror outfits operating out of
its territory. With the possibility of a confrontation between India and Pakistan
waning, this can only have a positive effect on the Indian economy.
Anyone who hoped to shake the foundations of the Indian economy
with this act of terror must be feeling very foolish indeed.
However, it would be wrong to say that the attacks had no impact
whatsoever on the Indian economy.
1. It affected tourism and hotels, with many tourists cancelling bookings.
2. The global economic crisis had already hit tourism and 26/11 only made
But tourism contributes a very small part of the GDP. It is not
something that will seriously impair the progress of the economy.
26/11 and after effects on tourism in India
Incredible !ndia no matter what
It was exactly a year ago the gateway of India - Mumbai was under the
siege of terrorists. 26/11 in 2008 is a day of horror in the minds of Mumbaites. The
World saw the terrorists’ activities and the commando operations live on many
channels. The burning picture of Taj Hotel symbolizes the terror unleashed in the
Mumbai coast. The 60 hr long battle saw the terrorists galloping at-last and
equally with great sacrifices of Indian warriors. More than 160 people lost their
lives and few hundreds were injured.
Mumbai Terror Attacks
On this day, the great Indian symbols were attacked. Gateway of
India, Taj Mahal Palace, Oberoi Hotel and Nariman House were some of the
important monuments attacked by the terror networks. It was not the first time
these patriotic monuments were aimed by miscreants. The terrorist bomb attack
on August 25, 2003 near the Gateway of India killed nearly 50 people and left
The monuments were damaged, the lives of many were shattered and
many establishments were under threat. 26/11 affected the life of common man all
over the country, especially in major urban cities like Delhi, Bangalore, Kolkata
and Chennai apart from Mumbai. All ways of life were affected. Travel and tourism
was also not an exception. It was a major casualty.
26/11 in 2008 had happened just at the beginning of the India’s best
tourist season in the decade. It was expected to cross the great landmark of 5
million foreign travellers in the year. 26/11 became the bottleneck for the
miraculous growing of tourism industry in India. In fact the tourism sector was not
sound enough to absorb such an impact as it was already affected by the economic
meltdown. Inflow of foreign travellers was reduced and local tourists avoided big
cities. Mumbai especially saw the significant reduction in the number of tourists in
the first three months after 26/11. The major casualty is the tourism ministry’s
projection of 10 million tourists by 2010. It is perceived that the target would be
difficult to achieve!
However, the concentrated efforts of industry and the Government
are now bringing fruits. They could mobilize voices of many world-wide agencies
like National Geographic to endorse and assure safe tourism in India for the
travelling community and promoted India as a must see destination. Thanks to the
confidence building measures and the great support by the Government
machinery, Indian tourism regained its lost glory by mid of 2009.
At the other end, Mumbai has seen the arrival of a new set of tourists.
Travellers flock to this place to view the monuments like Taj hotel, Gateway of
India, Cama hospital and Nariman house, which were under terror attacks. Local
tourists and foreign travellers’ inflows to Mumbai have been on increase on
account of this new found ‘terror tourism’. Bullet marks on walls, windows and
roofs, damaged regions and reinstated structures are all very inviting for the
tourists visiting here. Tourist guides and agencies give elaborate descriptions on
the events and showing various places under the siege. You can get details of the
past terror and bomb attacks at this place from these guides.
The surge of travel and tourism industry in the country in 2009 is a
pointer towards the great confidence the travelling populaces and vacation tourists
in safe Indian Destinations. Statistics points to the fact that there was a dwindling
of about 8% in the number of foreign tourists to India in 2009 comparing with the
corresponding numbers in 2008. This 8% is pretty small considering the real facts
about the economic recession and the fear spread due to the H1N1 flu. It just tells
that the terror attacks or security threats has not much affected the tourism
industry in India.
It is predicted that Mumbai is going to witness a surge in tourists as
the economy regains and the business travels increase. You can go anywhere in
India. You can be assured of extra secure tourist activities in the picturesque,
inviting and breathtaking Indian hot spots.
Terrorist Attacks Will Further Weaken a Slowing Indian
The Belvedere is an exclusive
club at Mumbai's Oberoi hotel. Along
with its equivalent at the Taj Mahal -- The
Chambers -- it is a popular watering hole
for India's business barons and CEOs.
According to an estimate by business
magazine Business Today, the members of
the Belvedere alone account for more
than 80% of the market capitalization of
India's publicly listed companies. In late
November, both clubs were savagely
mauled in the terror attacks that rocked
the city and shocked people around the
world. During a 60-hour siege at the two
hotels and other locations, terrorists took
hostages and ran riot with grenades, Small Things Happen In Such Big Cities
assault rifles and bags of RDX, a powerful
explosive. Ashok Kapur, chairman of Yes Bank, was among the 170 people killed in
the attacks. The terrorists did so much damage that the two hotels could be closed
for six months to a year.
The Oberoi and the Taj are not just places to strike deals. Events held
here routinely host the rich and famous. The presentation ceremony of The
Economic Times Awards for Corporate Excellence was to be held at the Trident --
the companion hotel to the Oberoi which was also attacked by the terrorists -- on
November 29. Prime Minister Manmohan Singh was to preside over the event.
Practically every CEO of India's leading companies would have been there. Perhaps
presciently, The Economic Times reported on November 11: "Given the high profile
nature of the event, the security agencies have already begun scouting the location
for D-Day." The three-day terror attack, which is now known as 26/11, put an end
to the celebrations.
The ripples have not been felt in India alone. "There will hardly be a
Fortune 500 chief executive who has not lately stayed in the Oberoi or the Taj
Mahal, and the impact of this attack will be felt in boardrooms around the world,"
wrote The Economic Times.
On the political front, the siege of South Mumbai has already taken
its toll. Union home minister Shivraj Patil -- responsible for the nation's security --
has resigned. Former finance minister P. Chidambaram has taken over that job.
Prime Minister Singh has taken charge of the finance portfolio. But the finance
ministry, in today's global crisis and domestic slowdown, is a fulltime job. Some
observers believe that Singh may not be able to do justice to it, given his other
In the state of Maharashtra, too, of which Mumbai is the capital,
heads have rolled. Chief minister Vilasrao Deshmukh has been forced to resign.
The last straw was his going to visit the ruined Taj with a filmmaker who
specializes in disaster movies in tow. The press dubbed it "terror tourism" and the
Congress leadership in Delhi sacked Deshmukh. The state deputy chief minister
and home minister R.R. Patil, who belongs to Nationalist Congress Party, a partner
of the Congress party, told a press conference that "small incidents like this [the
Mumbai terror attacks] do happen in big cities". He, too, had to step down after a
What will happen in the medium term is debatable. General elections
are due by the middle of next year, and it is possible that the opposition Bharatiya
Janata Party (BJP) may cash in on the widespread public anger. "This has
undoubtedly given a shot in the arm to the BJP," says Rajesh Chakrabarti, a
professor of finance at the Hyderabad-based Indian School of Business (ISB). "It is
an anti-incumbent advantage. Any opposition party would have benefited, but the
BJP benefits because it has been trying to project itself as being tough and has
been blaming the government for being soft on terrorists. How well it will be able
to hold on to this until election time and translate it into votes and seats remains
to be seen."
Political implications are also apparent at the international level. One
of the terrorists' targets was Nariman House, a Jewish centre, and as a
consequence, India and Israel are moving closer. India has also moved closer to the
U.S., which sent Secretary of State Condoleezza Rice to visit the subcontinent.
After visiting both India and Pakistan in an effort to avert armed confrontation --
which many in India called for, especially since the media labelled the terrorist
attacks as "India's 9/11" -- Rice urged Pakistan to cooperate with India in nabbing
the terrorists. (The terrorists are alleged to have been recruited in Pakistan.)
"At such times of crisis, the positive aspect is that not only do we see
all the political forces internally standing up as a single force to face the situation,
but internationally as well there is solidarity in the fight against terrorism," says
Bundeep Singh Rangar, chairman of the Delhi-based IndusView, a research and
advisory firm. Chakrabarti of ISB adds: "I don't see serious international fallout.
There will be some diplomatic efforts at trying to pinpoint Pakistan and some
pressure will build up on Pakistan. There has been talk in Washington about
reacting to the Mumbai event as a multi-country initiative rather than treating it
as just an India-Pakistan affair. But the problem, ironically, is that Pakistan now
has an elected government and they can't come out looking like they are giving in
to India's demands even if they believe that India's demands are right. For decades,
public opinion in Pakistan towards India has been negative. The perception of
public approval of terrorist activities targeted at India must change before
politicians can change. The Mumbai incident by itself will have only a temporary
impact. But if the talk of a military solution between India and Pakistan aggravates
then that can have a worse effect on capital flows than the terror attack."
When it comes to economic issues, Mumbai -- the country's financial capital -- is
likely to feel the impact of the terrorist attacks, much as New York City did after
September 11, 2001. "Mumbai brings in 40% of foreign trade, 60% of customs duty
collections, 40% of income tax collections, 20% of central excise collections and
$10 billion in corporate taxes," says Rangar of IndusView. Chakrabarti notes: "The
Mumbai terror attack has been the most dramatic in a long series of terror events
in India. It involved foreign hostages and places where business leaders, executives
and foreigners frequented. It has therefore been a much more potent media drama
than any of the previous terror events. This grabbed worldwide attention and there
is certainly a negative impact on India's risk and security perception. It will dent
foreign investors' views of India. This will lead to a drop in investments, but I
expect it to be marginal."
Gloom and Doom
The attacks came at a time when India's economy had already begun
to slow as a result of the global recession. The widespread fear and anxiety have
added to the gloom. According to recent data, in the second quarter (July-
September) of the current financial year, GDP growth has fallen to 7.6% compared
to 7.9% in the previous quarter. The growth rate in the first half of the year was
7.8%, compared to 9.3% for the corresponding period of the previous year.
The mood of business has turned highly bearish. Citibank estimates
that GDP growth will be 6.8% in 2008-09 and 5.5% in the next fiscal year. Goldman
Sachs and Merrill Lynch expect 2009-10 growth to be 5.8%, Nomura believes it will
be 5.3% and First Global puts it at a bottom-of-the-barrel 3.5%.
Exports are down. In October, they fell 12.1%. The $200 billion target
for 2008-09 will most likely be missed. Manufacturers are pessimistic. The ABN
AMRO Purchasing Managers' Index, an early indicator of the mood of
manufacturing, is at its lowest since it was set up in April 2005. To take one
specific sector, the Society for Indian Automobile Manufacturers estimates that
vehicle sales could slide 25.5% in the last three months of the calendar year and
more than 34% in January-March 2009. Real estate is also in the dumps. The
Bombay Stock Exchange (BSE) Sensex has meanwhile been hovering around 9,000,
a far cry from the 21,000 it had crossed in January.
These clouds do have a silver lining: Inflation, which was almost at
13% in August, fell to a seven-month low of 8.40% for the week ended November
22. This gives the Reserve Bank of India (RBI) the leeway to focus on boosting
growth rather than fighting inflation. Indeed, on December 6, RBI governor D.
Subbarao announced a 1% cut in the lending rate, effective December 8. The repo
rate, the rate at which the RBI lends money to banks, now stands at 6.5%.
Subbarao told a news conference later that growth would moderate "more than
anticipated". On the flip side, inflation, too, would decline to below the estimated
7%. The government has meanwhile cut the administered price of petrol and other
petro-products. The central government has also been announcing components of
a stimulus package to boost the economy.
Still, many believe the terrorist attacks will hurt the economy at a
time when it is weakening. The Indian Council for Research on International
Economic Relations (ICRIER) has an estimate of the contribution of "external
shocks" such as the financial crisis and the terror attacks. The New Delhi-based
think-tank recently completed a study on the effect of external shocks on the
country's GDP growth rate. According to Rajiv Kumar, director & chief executive of
ICRIER, "ICRIER has been forecasting India's GDP growth rate with the use of
leading indicators. These are variables that are considered to have significant
influence on the future level of economic activity in the country." The 10 indicators
that ICRIER uses include production of machinery and equipment; sales of heavy
commercial vehicles; non-food credit; railway freight traffic; cement sales; sales of
We will never forget
the corporate sector; fuel and metal prices; real rate of interest; the Sensex; and the
GDP growth rates of the U.S. and Europe.
"Leading indicators can predict future growth based on what has
already happened in the past but cannot capture the impact of sudden external
shocks which may have an immediate impact on the economy," says Kumar.
"Examples of such shocks in the past are the IT boom going bust [after Y2K], the
crop failure in 2002-03 and the recent U.S. financial meltdown. The leading
economic indicator index, with a five-quarter lag, and the shock represented by a
dummy variable (equal to 1 with shock and 0 without) have been used to forecast
India's future GDP growth."
Impact on Industries
That's the macro picture. A
sectoral analysis sheds more light on the
possible damage to different industries.
"Terrorism's economic impact has
normally been short lived," says a report
titled, Economic Impact of Terrorism, by
securities firm Anand Rathi Financial
Services. "The immediate impact of
terrorism is the loss of life, destruction of
property and loss of man-days. Terrorist
acts also cause uncertainty, which impacts
economic activity. Tourism is one of the
first areas to be hit, with hospitality and Does that matter??
transportation feeling the pain the most. Gross earnings from foreign tourists are
currently around 1% of GDP. A marked slowdown in tourism activity will have a
perceptible impact on not only the hospitality and transportation sectors, but also
on the overall economy.
"The impact on the earnings side (through lower room occupancy,
depressed room rental, lower passenger traffic or lower air fares) may eventually
reverse once the situation normalizes. On the expenditure side, though, the
impact of higher costs from increased preventive arrangements and higher
insurance premiums is likely to be more permanent." An important subset of
tourism -- medical tourism -- is also likely to slow in the short term.
"Hospitality and tourism are two sectors that will certainly take a
direct hit," says Chakrabarti of ISB. "This will be a gut reaction to the event and, if
nothing else happens, then things will soon get back to normal." According to
Rangar, "Estimates suggest that nationally hotels have seen about 60% booking
cancellations." Holiday destinations such as Goa are feeling the pinch even more
because of intelligence reports that they could be future targets for terrorists.
Hotel occupancy in western India is down some 25% and rates have plunged. Civil
aviation is another sector in the dumps. But it was already troubled before the
Rangar believes the overall damage to India's economy could be
significant. "Analysts have already started giving initial estimates that suggest the
loss in business due to the attacks would be about $100 billion, arising from crucial
institutions, such as the stock exchanges, commodities and money markets, and
business and commercial establishments which remained closed," he notes. "There
is also a hit of $20 billion on the foreign exchange front. But though the numbers
are alarming, it is just a matter of time before the city and its people rise to face
Exports, already down, could be further hit as foreign buyers put off
visits. "International clients prefer to stay at five star hotels such as the Taj and the
Oberoi," says Ganesh Kumar Singh, president of the Federation of Indian Export
Organizations. They now see a risk staying at any five star hotel. The U.S.
commercial nuclear mission has put off its India trip as have delegations from
several other countries.
The perception of increased risk in India could also impact the IT
industry, which depends on client visits to seal deals. But the larger firms in the IT
industry have already spread their risk; they have back-up operations in other
countries such as China. The effect there will be only temporary. Some analysts,
however, believe that the business process outsourcing (BPO) industry may not be
so lucky. "Oil & gas and other large operations are vulnerable to attack," says the
Anand Rathi report. Beefing up security will add to their costs. But these are
strategic industrial assets for the country as a whole, and part of the expenditure is
likely to be borne by the government.
Does anybody gain? Certain lines of IT, particularly those related to
security, will get some benefit. "Companies catering to defense, security and
surveillance needs are likely to see a boost in demand," says the Anand Rathi
Rangar ends on a note of confidence. "Despite the slowdown -- and the
recent incidents -- global companies are expected to continue to exhibit their
confidence in India," he says. Adds Chakrabarti: "The confidence crisis is far worse
in other parts of the world compared to India. Foreign investors need to put their
money somewhere and India still looks very attractive. At worst we will grow at
6%. Most countries would die to grow at this rate at this point in time."
TERRORISM IS HOLDING BACK INDIAN ECONOMY
World in recent past, has witnessed several economies burning with disaster &
crisis. Today every nation faces some or the other economic, social or communal
unrest. Further, globalization has enabled the impact of these tremors to be felt
even at remotest part of the world. India till FY 2008 had seen a steady growth
with its GDP shining as high as 9.3%. Subsequently, the economy was hit with US
Sub Prime Crisis, Satyam scandal & the Mumbai 26/11 Terrorist attacks.
Many believe that
terrorism can't hamper ones economic
activity as it only destroy a small
fraction of the stock of capital of a
country. However, a broader look at
the geo-political & economical
scenario can easily erode this
misconception. India has been facing
the terrorism threat as long as since
1970. Terrorism in India is primarily
attributable to Islamic, Naxalite and
various other radical movements. At least 232 of the country’s 608 districts were
afflicted, at differing intensities, by terrorism. Over a period of time terrorism has
severely affected Indian economy. Following are the issues that had been major
hindrance for Indian economic growth:
A] SHORT-TERM IMPACT
1) Loss of Human Capital
The human costs have been horrendous. Estimates are in past 5 years
4000+ were killed in terrorist attacks. This puts India next to Iraq both in terror
deaths and terror incidents. The recent 26/11 Mumbai attacks itself left 257-300
dead and 700 injured which includes several high profile individuals such as Shri
Ashok Kapur, chairman of Yes Bank who was killed in attack.
2) Investor Behavior
Frequent attacks on commercial & government institutions shatter
the confidence of the investors causing heavy investment drainage. One example
of the same is the terrorist attack in Indian Parliament in 2001, which
internationally provoked insecurity & discouraged the investors (FII's & FDI's),
obstructing the economic growth. A heavy impact of this can be observed at the
stock market that keep diving down post any major terrorist event.
3) Short Term Financial Loss
In short term the obstacles like loss suffered due to the diversion of
business away from the city to other locations, lost earnings of public due to
disability and trauma among survivors etc. drains out the productivity levels &
impact the respective economy adversely. Post 26/11 the Taj & Trident Hotels
incurred heavy loss as operations were halted for 3-4 months. After 26/11 Mumbai
attack Pak cricket team had to cancel its Mumbai tour due to which BCCI has
incurred a loss to the tune of INR 120 crore. Another such incident was Post Ex-PM
Indira Gandhi's assassination 1984 riots which hit the economy severely especially
the Agriculture & Transport industry that lost hundreds of crores.
4) Retrenchment effect on Specific Industries
The Jaipur serial blasts, J&K Terrorism & Mumbai 26/11 attacks did
have immediate and concentrated impacts on a number of industries: most
notably, airlines, aerospace, travel, tourism, insurance, lodging, restaurants,
recreation and related activities. Gross earnings from foreign tourists are currently
around 1% of GDP. Post 26/11 terrorist attack estimates suggest that nationally
hotels have seen about 60% booking cancellations. Hotel occupancy in western
India is down some 25% and rates have plunged. These industries suffered
concentrated economic and job losses. Of course, regions or localities with heavy
concentrations of these industries suffered disproportionately as well.
B) LONG-TERM IMPACT
1) Political Instability
The assassinations of 2 Ex-PM of India, Mrs. Indira Gandhi, and Mr.
Rajeev Gandhi already had jolted Indian politics & economy at large. India had lost
2 of its strongest pillars which otherwise would have taken Indian politics,
Business & industry at unimaginable heights. Recently speaking the siege of South
Mumbai has taken toll as home minister Shivraj Patil, Chief Minister Vilasrao
Deshmukh & Home minister R.R. Patil had to resign. This further unstabilized the
Indian industry from a long-term perspective. The Political instability at times
have also let to erosion of FII's & FDI's.
2) Global Implications
India, post Kargil war then Attack on Parliament now 26/11 has lost
millions of business as the trade link between the two countries are frozen during
such period. Agri-Exporters in bordering states have taken heavy burns. This has
resulted in unemployment in these regions, which in turn again triggers riots. 26/11
Attack involved foreign hostages and places where business leaders, executives
and foreigners frequented. This will lead to a drop in investments.
3) Long Term Financial Loss
The direct economic damage done by terrorist attacks: buildings and
infrastructure destroyed, productive lives ended. The structural damages post 26/11
attacks was amounting to total of INR 500 crores, which subsequently took its toll
on the insurance industry. Another form of longer-term costs security involves the
opportunity cost of spending additional money to fight terrorism. Currently India
ranks on 9th position in the world for highest military expenditure (2009-10),
which amount to sum total of USD 32,700,000,000. Further, a variety of new
spending on security occurred after this incident. As all this happens, economic
resources will be directed to shoring up security and diverted away from more
productive private sector activity.
To conclude with, let’s not forget that the enemies of our nation have
vowed to "bleed India through thousand cuts". Even if terrorism represents a small
fraction of the overall economic risk in India, it may have a large impact on the
allocation of productive capital across the country.
Post 26/11, India turns to Russia for small weapons
India, which has been procuring fighter aircraft and missiles worth
$1.5 billion annually from Russia, is now looking to buy small weapons too - like
assault rifles, sniper guns and automatic grenade launchers - for its paramilitary
forces, especially after the 26/11 Mumbai terror attack.
A Photo Which Depicts Everything But WE CANNOT CALL IT A KODAK MOMENT
So far, India has largely depended on Israel for sophisticated weapons,
guns and equipment to meet the challenges of internal security.
According to Leonid Nikolay Skofenko, head of KBP Instrument
Design Bureau in India, the firm was approached by officials of India’s elite
commando force National Security Guards (NSG).
“Post 26/11, the National Security Guards approached us to buy
automatic grenade launchers under direct sale. They had used the same in their
Mumbai operations, but at that time they had taken it from the army,” Skofenko
told IANS at Defexpo 2010.
“Earlier we had supplied the grenade launchers to the Border Security
Force (BSF) and the Central Reserve Police Force (CRPF) under a contract in
August last year. Now under the option clause we would supply the automatic
grenade launchers to the NSG and the Indo-Tibetan Border Police (ITBP),” he said.
The KBP Instrument Design Bureau is one of the leading design
companies in the Russian defence industry.
The 30 mm automatic grenade launcher is handy because of its light
weight. One trooper can carry the grenade launcher and mount it. The rate of fire
per minute is 400.
Skofenko said they would be bidding for the NSG tender for sniper
rifles too. “The NSG has floated a tender for sniper rifles. We are pitching for our
anti-material rifle (OSV-96 sniper rifle). It can be used against troopers and is also
designed to engage targets like light armoured vehicles at a distance of up to 1,800
metres,” he said. “We would also be supplying these rifles to Marcos (Indian Navy
commandos),” he added.
Besides, his company is also bidding for a NSG tender for magazine
grenade launchers - a hand-held launcher that can be used inside buildings during
“The NSG says they may consider buying our magazine shotgun,” he said.
Andrey Baryshnikov, of another Russian defence company Izhmash, said they have
brought a series of AK assault rifles to India - AK-101 to AK 104.
“We intend to sell AK-101 to AK-104 rifles to India. These are technologically
advanced rifles as compared to the AK-47 and AK-56 (Chinese). We are making a
proposal to the Indian government that we can produce these rifles in India under
a licence system.”
“We are also looking for joint ventures with India companies. The Indian
Ordnance Factory Board is making Insas (Indian National Small Arms System)
rifles. But they are not producing it in enough numbers and the quality of their
weapons has to be improved. We are ready to meet all requirements,” he said.
Baryshnikov said around 60 countries, including Thailand, Vietnam and Indonesia
are using their AK rifles. Russia does not sell weapons to Pakistan.
Post-26/11, US more committed for biz with India
Washington In a bid to restore investors' confidence after Mumbai
terror attacks, the US-India Business Council (USIBC) has presented an optimistic
assessment of the security situation in India, saying it is committed to doing trade
with the country.
Government Security Officers from the American Embassy in India on
Saturday shared with USIBC member-companies a cautious but upbeat assessment
of the security situation in Mumbai, as life in India's financial capital returns to
Representatives of the Taj Group of Hotels and Oberoi Group of
Hotels, who also joined in the USIBC members-only tele-conference, indicated
that sophisticated security measures had been put in place since the November 26
attacks on Mumbai, reassuring future visitors and hotel guests.
The Taj and Oberoi properties will reopen for business on December
21, it was reported, the USIBC, a premier business advocacy group, said in a
statement."It is a testament to the resilience and courage of the people of Mumbai
how quickly India's financial capital has returned to normal. It is equally
remarkable how India has demonstrated such restraint in so far as its relations
with Pakistan in the wake of the Mumbai attack. For USIBC, this must mean a re-
doubled commitment to doing business with India," Ron Somers, President of the
"The correct response to this heinous act is for the US business
community to get right back on jet planes as soon as possible to renew our
engagement and partnership with India," he said.
We are safe till they are there
Security market soars after Mumbai attacks
India's IT sector has stepped up surveillance measures and introduced
integrated security products as safety concerns rise across the country.
Earlier this month, Nasscom (India's trade body and chamber of
commerce for the IT-business process outsourcing industry) sent out invites for
the India Leadership Forum 2009, to be held in Mumbai in February. A note at the
end of the invite said: "At Nasscom, we understand the security concerns that you
might have following the unfortunate incident at Mumbai. In all our conferences,
we ensure that the security measures are stringent and foolproof to the best of our
V. Rajendran, vice president, HCL Securities, told ZDNet Asia, since
the Mumbai attacks of Nov. 26 (26/11), "securing lives and property has emerged as
a key concern in India". As a result, companies, hotels, retail chains and banks are
seriously considering security products and services that offer enhanced security.
"After the recent terror attacks, there is growing emphasis on
deploying technologically-enabled security systems both in the public and private
sector," Rajendran said in an e-mail interview.
Sivarama Krishnan, executive director, PricewaterhouseCoopers told
ZDNet Asia in a phone interview: "Post 26/11, companies and the government have
begun to look beyond IT--at the physical infrastructure." Their focus is now on
three key areas--security of the physical infrastructure, the resilience of the
security system and the disaster recovery mechanism they have in place.
The IT industry is taking the security issue even more seriously. Raju
Bhatnagar, vice president, Nasscom noted: "The added impetus for the IT sector is
that it is a highly visible industry segment and very people intensive."
Stepping up security
The immediate impact of the Mumbai attacks is felt on the physical
security at offices, malls and other public places. Krishnan said: "Earlier, anyone
could walk into a commercial building. But today, there are several security
checks. Guards are even asking visitors to show their identity cards."
In fact, Nasscom is in the process of collating some best practices that
can be circulated to its members to help create awareness. According to
Bhatnagar, companies have instituted three key security steps post 26/11:
1. Closer checks on vendors and suppliers visiting office premises. Such visitors
are asked to provide adequate details so that the individuals can be
identified when they are within the office.
2. Background checking on new recruits is being given a greater importance.
The National Skills Registry system to ensure individuals employed by
organizations have their background and antecedents verified to prevent the
menace of fake resumes, is being made mandatory by many companies.
3. Entry and exit rules--such as recording one's arrival in the visitor's register--
are being enforced more strictly. In many organizations, visitors are escorted
from the reception to meeting place and then back to the reception.
Following the terror attacks, large IT companies had approached
the Indian government for CISF (Central Industrial Security Force) protection to
their facilities. CISF's role was to guard only public sector units. Recently, the
Indian government (through an ordinance) allowed CISF to guard private
On its part, the government too is busy exploring new systems for
increased security. As per reports, scientists are evaluating a state-of-the-art
embedded security system to safeguard busy railway stations across the country,
some of which had been targets of terror attacks. The security system comprises 14
sensors that carry out surveillance and detection activities and would help do away
with frisking of people. One sensor even detects explosive material using Raman
Spectroscopy. New products hit the market
Rising security concerns are boosting the demand for products
that integrate the existing security systems to offer better surveillance.
Krishnan said: "In the past, there were technologies. But they were
installed in a dispersed manner. Today, these are being integrated to offer more
effective and real-time surveillance." Integrated security solutions leverage
technology to analyze incoming video information from cameras, pinpoint
potential threats, and escalate information through the established IP
infrastructure to appropriate personnel or systems.
For instance, HCL Security recently introduced a unique concept--
called "Safe State". It is an architecture leveraging technology to build a security
framework that can safeguard life and infrastructure. It can help secure vulnerable
areas such as hotels, hospitals, IT companies and outsourcers, educational
institutions and railway stations.
Rajendran explained: "Safe State integrates technology with the
physical surveillance and security solutions, making them work together."
While there is no official data available that could indicate the
accurate size of the market today, Rajendran noted a study by Frost and Sullivan
that estimated the security surveillance market at US$407 million to US$509
Naren Nagpal, chief executive officer, ReadiMinds, told ZDNet Asia:
"Post the Mumbai attacks the market size of the security products industry has
probably seen a significant change." ReadiMinds specializes in transaction security,
fraud prevention, real-time risk monitoring and mitigation, and emergency alert
Prior to 26/11, ReadiMinds primarily served the BFSI (banking,
financial services and insurance) industry. "Post 26/11, we have also introduced our
real-time electronic surveillance systems in India for homeland security
applications," Nagpal said in an e-mail interview.
Investors worry about another attack after Mumbai
The risk of militants striking again in India worries many investors
who fear that a second attack similar to last year's Mumbai raids could shake what
has so far proved to be a resilient economy.
In some ways, last year's attacks in which Pakistani-based militants
killed 166 people appear a distant memory. While they ratcheted up tensions with
Pakistan, they failed in a principal aim -- to bring the two nuclear-armed foes to
Foreign investors bought more than $15 billion in Indian shares this
year, helping local stocks gain nearly 80 percent, in a vote of confidence for the
trillion-dollar Indian economy.
But the Mumbai raids forced investors to consider that any new
attack could spark regional tension and panic in an economy that is just recovering
from the global economic slowdown.
"While India has made some improvements to its counter-terrorism
capabilities, it remains vulnerable to terrorist activities," wrote Maria Kuusisto of
"Another high-profile, mass-casualty attack would lead to intense
domestic pressure on Delhi to adopt a more firm policy towards Pakistan and even
retaliate, which would raise regional tensions."
Businesses in Mumbai, which was also a target in serial bomb blasts in
1993, lost about $800 million after the 2008 raids. The stock exchange was shut for
a day and hotels and airlines struggled as countries issued travel advisories.
Another strike in India could also prove a political distraction for a
government that is gaining traction with financial reforms in such sectors as
insurance and pensions.
Companies are now spending millions on revamped security, adding
to the costs of doing business in India. About 80 firms, including software
exporters, hotels and energy companies have applied for paramilitary cover.
"26/11 was big and we are constantly concerned about the safety of our
facilities, our workforce," S. Mahalingam, chief financial officer of Tata
Consultancy Services, India's top software exporter, told the Reuters India
Investment Summit in New Delhi this week.
One follow-on militant attack nearly triggered war in 2002.
India and Pakistan, which have fought three wars, initiated the
biggest military build-up on their border in 2001 after an attack on the Indian
parliament that New Delhi blamed on Pakistan-based guerrilla groups.
But it was another attack on an Indian army camp in Kashmir five
months later that raised real fears the two nations may be on the brink of war.
Some embassies advised their citizens to evacuate New Delhi. A flurry of
diplomatic peace missions led by the United States eased the situation.
Indian markets have a mixed record of responding to attacks. In the
limited three-month Kargill conflict with Pakistan in 1999, the main stock index
actually rose -- by a third.
In 2001, stocks fell 8 percent in the two tense weeks after the
parliament raid but recovered losses in the next fortnight.
After the 2002 army camp raid, stocks, already hit by uncertainty
sparked by huge religious riots in Gujarat state, lost a tenth of their value in the
following eight days and did not recover for the rest of the year until tensions
Seven years on from that, investors are drawn to India's near 7-
percent economic growth and promise of stability after the Congress party-led
government won re-election in May.
"The risk perception has certainly deteriorated. This, however, hasn't
deterred investors from participating in, and benefiting from, the India
opportunity," said Manoj Vohra, head of the Economist Intelligence Unit in India.
Investors simply have to get used to the new reality, Kevan Watts,
country head of Bank of America-Merrill Lynch, told the Reuters Summit.
"It is the reality all across the world. So you put your business
continuity plan in place, you put up as much physical security as you can, and you
just get on with your business."
India faces growing Chinese hostility after 26/11
As China strengthens its navy with acquisition of aircraft carriers and nuclear
submarines, India will soon find that unless it boosts its maritime muscle, it
will be strategically marginalised and outflanked by an assertive and
expansionist China, says G. PARTHASARATHY.
While India received overwhelming international sympathy and
support during the 26/11 terrorist outrage, the Chinese reaction was one of almost
unbridled glee, while backing Pakistani protestations of innocence. The state-run
China Institute of Contemporary International Relations claimed that the
terrorists who carried out the attack came from India.
Moreover, even as the terrorist strike was on, yet another Chinese
“scholar” gleefully noted: “The Mumbai attack exposed the internal weakness of
India, a power that is otherwise raising its status both in the region and in the
Not to be outdone, the Foreign Ministry-run China Institute of
Strategic Studies warned: “China can firmly support Pakistan in the event of war”,
adding: “While Pakistan can benefit from its military co-operation with China
while fighting India, the People’s Republic of China may have the option of
resorting to a strategic military action in Southern Tibet (Arunachal Pradesh), to
thoroughly liberate the people there”.
Rather than condemning the terrorists and their supporters, Chinese
Foreign Ministry Spokesman Qin Gang urged India and Pakistan to “maintain
calm” and investigate the “cause” of the terror attack jointly. The visiting Chairman
of Pakistan’s Joint Chiefs of Staff General, Tariq Majid, was received like a state
dignitary by Chinese leaders, with promises of support on weapons supplies
ranging from fighter aircraft to frigates.
New Delhi should also have no doubt that China will exploit the
American economic downturn and the pro-Chinese views of Secretary of State
Hillary Clinton, to get the Americans to revert to the policies of the Nixon, Carter
and Clinton Presidencies and to make common cause with it on issues like nuclear
non-proliferation, the Comprehensive Test Ban Treaty and even on Afghanistan
and Pakistan, while undermining Indian interests.
Echoing the Pakistani line, the Communist Party mouthpiece, The
People’s Daily recently suggested that for the United States to deal with problems
in Afghanistan, it should not merely involve itself in the “Afghanistan problem”
and the “Pakistan problem” but also in the “India-Pakistan problem”.
Hillary Clinton has characterised the US-China relationship as the
“most important bilateral relationship in the world in this century”. Her visit to
China was followed almost immediately by the visit to Beijing of a senior Pentagon
official, who joyously proclaimed the resumption of defence ties with China.
The Bush Administration had an overarching strategic vision of its
relations with India, premised on India’s pivotal role in confronting terrorism,
safeguarding the sea lanes of the Indian Ocean and in promoting “strategic
stability” in Asia. With elections around the corner and the UPA Government in a
“lame duck” mode, Washington is unlikely to take any interest in fashioning a
larger vision for India-US relations.
The challenge we face in coming months is on how we can pursue our
interests in the aftermath of the 26/11 carnage, without making the Indo-US
relationship exclusively fashioned by developments our western borders. The
Obama Administration’s decision to curb outsourcing, without any prior
consultations, manifests an American propensity to act unilaterally and
peremptorily on issues of vital interest to India.
The Prime Minister’s Special Envoy Shyam Saran recently noted “an
apparent willingness on the part of the US to accommodate China’s regional and
global interests as a price to be paid for China refraining from tipping the US into a
full blown economic and financial crisis through its own policy interventions and,
hopefully, supporting US economic recovery”.
China appears set to exploit current developments to transform the
American dominated unipolar world order by a bipolar world order in which it
shares global hegemony with the United States. Saran perceptively noted: “This
will imply a more energetic pursuit of our relations with countries like Russia and
middle powers like Brazil, South Africa and Mexico. The European Union and, in
particular, some of its individual members like France, can be useful political and
It remains to be seen if we can fashion imaginative strategies to deal
with these emerging challenges.
Mumbai attacks costs insurers Rs 500 crore: IRDA
General insurers may suffer a loss of over Rs 500 crore due to the
Mumbai terror attacks, according to the Insurance Regulatory and Development
“This is the biggest estimated loss to the Terror Pool since its
inception in 2002 and Rs 50 crore has already been released,'' IRDA said in its
annual report for the year 2008-09 which was released on Wednesday.
The companies would also have to pay more for insurance under the
terror pool as the rates were hiked on April 1, 2009.
Claim settlements under the terror pool were very low at Rs 1.05 crore
in 2007-08, while the premium collected was Rs 500 crore, IRDA said.
Luxury hotels, the Taj Mahal Palace and Oberoi Trident, were
targeted by terrorists on November 26, 2008, which claimed 200 lives besides
Terror cover premium hiked by 30%
Beginning April 1 2009 companies have to shell out more to buy an
insurance cover against terrorist attack.The insurance companies offering terror
cover decided to increase the premium rates by around 20-30 per cent, from April.
Claims against terror cover are paid from a pool made out of
contributions from all general insurers. The pool is managed by the General
Insurance Corporation of India (GIC Re). The terror pool has a corpus of around Rs
1,400 crore as on date. The pool provides cover for property loss or damage and
business interruption claims arising out of terrorist activities.
The decision to hike the premium has been taken keeping in view the
depletion of the terror pool on account of the payout to Hotel Taj Mahal Palace
and Tower and Hotel Trident-Oberoi in the aftermath of the Mumbai terror
attacks, said Mr Gaurav Garg, CEO and MD, Tata AIG General Insurance. Tata AIG
General Insurance is the lead cover provider to Taj hotel.
The decision has been taken by the pool and approved by the
regulator, said Mr Yogesh Lohiya, Chairman and Managing Director, GIC Re.
The terror pool has a good corpus as there were not many claims prior
to those by Taj and Oberoi. As more people are looking to buy a terrorism cover,
the corpus of the pool should increase, Mr Lohiya said.
An initial amount of Rs 25 crore was paid from the terror pool to both
hotel Taj and hotel Trident-Oberoi as an initial payment before the final damage
assessment was made.
The final payout is expected to be in the range of Rs 500-600 crore,
including business interruption claims, Mr Lohiya said. The final payouts are
expected to be released soon after the final survey and assessment are over.
“We are awaiting the final report of the assessment, which is expected
to be ready soon. The balance amount will be released only after the claim
processing is over,” Mr Garg said.
The Taj cover is provided jointly by three insurers — Tata AIG
General Insurance (65 per cent share), ICICI Lombard General Insurance (30 per
cent) and IFFCO Tokio General Insurance (5 per cent). In the case of Hotel-
Trident Oberoi, the cover is provided by New India Assurance Company and
United India Insurance Company.
“In any part of the world terrorism is unwanted as it
not only kills the human life but also the infrastructure, industry
ultimately shackling its overall growth”.