Foreign Investors Concerned About India’s Rising Violence

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July 28 – Bombs rocked two Indian cities in the last two days, killing more than 50 and injuring several hundred. While the culprits have still not been identified, authorities claim the unprofessionally made bombs were meant to create animosity and unstability in the subcontinent.

India's ruling coalition recently won a trust vote after a large minority led by the Communist Party of India pulled out of the government. The same government is up for elections again next year, when their five-year term ends. Bombs, just before elections, as a means of creating unstability are unfortunately becoming more common in India, as terrorist fractions plan to divide the country on communal grounds.

Bangalore the world's backoffice, located in southern India, witnessed six bombs on Friday afternoon, while Ahemdabad, in west India, the hotbed of communal tension witnessed 17 bombs on Sunday monring, two of which occured in hospitals treating the injured.

The bombs are sure to dampen foreign investment in the Indian economy. According to Statfor, a number of foreign investors have already begun second-guessing their cost-benefit analysis of setting up shop in India after getting a rude awakening of what it means to do business in a country where communal riots, infrastructural breakdowns, abrupt changes in regulation and militant attacks are a constant worry. Many software multinationals like IBM and Microsft have their offices in Bangalore, Ahemdabad, a secon-tier city, is becoming a popular destination for foreign companies to park their funds due to the incentives the government offers. Financial gurus now however fear that foreign investment might be put on hold as India is considered a potentially explosive country.

The recent explosions have succeeded in creating a sense of animosity, hostility in a country which has traditionally been peace loving. “This is different, because for the first time it’s everyday, it’s utterly anonymous, it’s excessive,” said Shiv Vishvanathan, a professor of anthropology in Ahmedabad, told the New York Times. “The familiar becomes unfamiliar,” he said. “The apple seller you meet might be carrying a bomb. It creates suspicion. It’s a perfect way to destabilize society.”

A report last year by the National Counterterrorism Center in Washington concluded that from January 2004 to March 2007, the death toll from terrorist attacks in India was 3,674, second only to that in Iraq during the same period.

For a Chronology of attacks on India click here.