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Terrorism hits India’s financial center

Kai Ryssdal Jul 11, 2006

KAI RYSSDAL: The wire services say it’s more than 160 dead now. 460 wounded. Coordinated train bombings at the height of Mumbai’s evening rush. The city used to be called Bombay. But it has another nickname, too: India’s financial capitol.

At the moment there are no claims of responsibility. No clear idea who exactly did it. But there are some vague theories as to why they hit where they did. We reached Khozem Merchant in Mumbai. He’s with the Financial Times there. Mr. Merchant, why Bombay?

KHOZEM MERCHANT: Bombay is a very visible target of India’s economic strength. Even before the economy has strengthened, over the past several years, three-four years, this city has been a target because it is an economic center. It’s a commercial center. It houses a stock exchange. And it’s home to all the companies’ leading businesses. So it’s a very easy target which, if struck, will at least demonstrate that India has been hurt.

RYSSDAL: Do you think it will actually hurt though? Will companies shut down? Will foreign investors stay away?

MERCHANT: I don’t think domestic companies will attach sufficient importance to this to change their business plan. The underlying trend in this country is for long-term growth. However, I do think that foreign investors who are new to India and have been ambivalent in the past because of security concerns relating, perhaps, to issues further afield, such as Pakistan, may be concerned and think twice about making debut investments in India.

RYSSDAL: This is not, unfortunately, the first time there have been big bombings in Mumbai. Thirteen years ago the stock exchange was struck. Just three, four years ago some very large car bombings. It seems there’s a pattern here.

MERCHANT: There is a pattern. It is a — if you can use the word — a popular target for terrorists. That’s unlikely to change. If anything, it’s likely to gather strength as the strength of the city’s economic profile itself gathers momentum.

RYSSDAL: What will tomorrow bring in Mumbai? What do you think will remain closed and what might go on as normal?

MERCHANT: Well, what will go on normal, for one, is trading on the stock exchange. The administrators there have said that the stock exchange will be open for business tomorrow. The stock exchange has been recovering some of its losses since the meltdown in May. In fact it’s gained, as of today’s close, 18.9 percent since the low point on June 14. So, my hunch is that not only — as we know the markets will be open, definitely — but they’ll probably have sort of an uptick in performance just to demonstrate resilience to such an attack.

RYSSDAL: Khozem Merchant is a correspondent with the Financial Times in Mumbai. Mr. Merchant, thank you for speaking with us.

MERCHANT: Not at all. Thank you.

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