Investors Re-Assessing Opportunities In India

As war clouds recede, investors are re-assessing investment opportunities in India. But this time round, a new risk has been added in the risk assessment of the country -- war risk. India, which was always considered to be stable and safe, now carries a war risk.

Leading foreign real estate consultants have stated that their overseas clients have delayed their investment decision following the foreign media hyping up the possibility of nuclear war between India and Pakistan. "Many information technology and IT-enabled companies especially in the US have decided to postpone their expansion projects. We hope it is temporary phenomena," said CB Richard Ellis managing director Anshun Magazine.

 

Many global investors especially from the US, who had planned software and call centres in India are relooking at the investment proposition. "Some have decided to spread their risks by investing in other Asian countries as India is not considered to be stable any more," said a senior official from an American-based real estate consultancy firm. India faces a lot of competition from China, the Philippines, New Zealand and Ireland. This will further intensify.

The Western media talking of nuclear war has created a lot of discomfort and has deterred some overseas companies, which have put plans on hold, said real estate consultants. A large software centre that was to come up in Pune has been put on hold. Many foreign IT companies had planned expansion in the country. They are now relooking at investing in nearby countries instead. This impact and delay in investment will remain for at least a period of six to nine months, said Magazine. The temporary set-back in business is especially marked in the area of IT and IT-enabled services, hotel and retail, he added.

Infosys Technologies' chairman Narayan Murthy has reportedly stated that business has been affected in the software sector, especially in the case of companies that depend on business from the US. HSBC which has set up two offshore processing centres in the country -- Hyderabad and Bangalore -- continues to experience traffic from abroad. However, the bank's deputy chief executive Christopher Hothersall said if need be, traffic can always be shifted to another centre in another country.