Indian Businesses Push for Security

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By Rama Lakshmi
Washington Post Foreign Service
Wednesday, December 17, 2008

NEW DELHI, Dec. 16 -- Four days after gunmen struck Mumbai, prominent business leaders met in the distant southern Indian city of Bangalore to vent their ire.

The leaders, from India's biggest technology, software and biotechnology companies, said the attacks on the nation's business hub would shatter investor confidence in the Indian economy, participants recalled. They demanded that the government provide them with automatic weapons, grenades and military support to safeguard their facilities.

"We feel vulnerable; we are the soft targets for terrorists. In Mumbai, they attacked the heart of our economy," Kiran Mazumdar-Shaw, chief executive of the biotech company Biocon, said in an interview. "We have to be prepared. It is a wake-up call for the business community in India."

Biocon and the other business technology companies are working with the authorities in Karnataka state, of which Bangalore is the capital, to develop a security force for the city's industry sector. And last week, the Federation of Indian Chambers of Commerce and Industry in New Delhi offered to pay a special tax if the government did not have the resources to counter terrorism.

At least 171 people died and more than 230 were injured in last month's attacks in Mumbai, the latest in a series of bombings that have ripped through several Indian cities since May. But analysts are just now grasping the damage from the attacks on an economy battling the global financial slowdown.

After years of dizzying growth of more than 9 percent, India's growth estimate for the current fiscal year has been reduced to 6 percent, a seven-year low. Even before the attacks, industrial production and exports had slumped.

Critical sectors such as tourism, airlines and the outsourcing industry are beefing up security because of the recent attacks. But industry members contend that if India does not evolve a concerted counterterrorism policy soon, foreign investment will be frightened off.

As soon as the siege of the Oberoi Trident and the Taj Mahal Palace & Tower hotels was shown live on television, foreign tourists and business travelers began canceling trips. Business conferences were called off. Several governments put out travel advisories cautioning their citizens against visiting India.

For the first time since 2002, the Indian tourism industry, which employs 40 million people, has seen a drop in business of more than 2 percent. More than 5 million foreign tourists visited last year, bringing in more than $11 billion. The industry had lately been growing at a rate of 12 to 14 percent and had hoped to grow by 20 percent this year.

"India will not be defensive. The global traveler is not going to let the terrorists win. But the global economic slowdown and the attacks in Mumbai have taken a toll," said Ambika Soni, India's tourism minister. "Our campaign will say that India is like a continent, and an attack in Mumbai doesn't make the whole country unsafe. We want the additional security to be visible. We will say there is no problem in being frisked -- it means you are safe."

At a meeting in New Delhi on Monday, tourism industry representatives proposed a special security force, made up of former military personnel, to provide an additional tier of protection at monuments, bus stops and train stations, participants said. The Incredible India tourism campaign will be tweaked to highlight visitors who say they want to return.

But three weeks after the Mumbai attacks, the cancellations are continuing, and tour operators fear that the season may be lost.

"The memory of 60 hours of live television footage of the siege of Mumbai will not be wiped away in a hurry. So we are trying to stimulate the domestic traveler market," said Keyur Joshi, co-founder of India's largest travel Web site, MakeMyTrip.com, which has seen 25 percent of its bookings by foreigners canceled.

Another sector that intelligence agencies regard as a likely terrorism target is India's new growth engine -- the flourishing information-technology and outsourcing industry that employs millions of young software engineers.

In the wake of the Mumbai attacks, the new mantra in the weekly meetings of several companies is "security preparedness," and foreign clients are insisting that they subject their facilities to thorough searches, screen employees and vendors and beef up safety drills.

"The vulnerability is being felt across the board," said S. Ramadorai, chief executive officer of Tata Consultancy Services, India's largest technology offshoring firm, headquartered in Mumbai.

But, he added, security preparedness in his industry does not stop at ensuring the physical safety of people and property. It extends to protecting the valuable data of global corporations.

"What is different for us," he said, "is that any disruption here will paralyze the intellectual capital that is deployed in our industry."


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