India's commercial capital comes under attack from terrorists at a time when the world's second-fastest growing economy is seen to be a critical part of the solution in fighting a global recession, says Bundeep Singh Rangar, chairman, IndusView Advisors Ltd.

Mumbai, the commercial capital of India, has come under attack from terrorists yet again, at a time when the world's second-fastest growing economy is seen by many analysts to be a critical part of the solution in fighting a global recession.

Mumbai is one of the world's top 10 centres of commerce and contributes to about 5 per cent of India's GDP and accounts for 25 per cent of the industrial output, 40 per cent of maritime trade, and 70 per cent of capital transactions to the economy. Mumbai's per-capita income is Rs48,954 ($990) which is almost three times the national average.

The city hosts the headquarters of a number of Indian financial institutions such as the Bombay Stock Exchange, Reserve Bank of India, National Stock Exchange, the Mint, as well as the corporate headquarters of many large Indian companies - including the three largest private sector companies Reliance Industries, Tata Group and Aditya Birla Group - and numerous multinational corporations. Most of these offices are located in downtown South Mumbai which is the nerve centre of the Indian economy.

Mumbai is a very resilient city. Each time it's been the target of a terrorist attack, it rebounds stronger and more resolute. Post the 11 July 2006 Mumbai train bombings, for example, as a show of investor confidence, the Bombay Stock Exchange had rebounded, starting the day with the BSE Sensex Index up by nearly 1 per cent in morning trades. Foreign investors also retained confidence, with the Sensex up almost 3 per cent at 10,930.09 at the end of the day's trade.

This time as well, on the first day of trades on the Bombay Stock Exchange after the simultaneous terrorist attacks on south Mumbai, the BSE Sensex closed three quarters of a per cent higher despite it being the laast trading day of the month and therfore the monthly settlements day.

India is set to register a strong growth of about 7.5 per cent this financial year, a marginal drop from 9 per cent that the country achieved last year when compared to emerging markets peer China that will drop to similar level from about 12 per cent last year, its lowest since 1990, according to estimates.

Trade between India and Europe is expected to touch $100 billion by 2010 from current level of $80 billion, according to industry estimates. Inorganic growth among companies is expected to play an important role. Acquisitions by European companies accounted for 45 per cent of the inbound deals (deals by overseas companies in the country) in India. Indian companies' acquisitions in Europe accounted for 58 per cent of the total acquisitions made overseas, during the first three quarters of this year.

The UK has been the country of choice for overseas investments by Indian companies that invested $6 billion in the country during the first half of 2008. The investments by India Inc. in Britain during the fiscal year 2007-08 has created 3,846 jobs, ahead of its rival economy China that was involved in creating only 898 jobs, according to the U.K.'s Department of Trade and Industry. In terms of the number of new projects, India ranked seventh with 75 new projects, out-numbering China with 59 new projects.

This firm footing that the Indian economy finds itself in, has a lot to do with the contribution from Mumbai, its financial capital that brings 40 per cent of foreign trade, 60 per cent of customs duty collections, 40 per cent of income tax collections, 20 per cent of central excise tax collections, and Rs40,000 crore ($10 billion) in corporate taxes to the Indian economy.

Mumbai is home to Bollywood, the largest film making industry in the world; the Bhabha Atomic Research Center, which will see its role gaining significance once the Indo-US civil nuclear deal comes in to force. Other prominent industry sectors in the city include aerospace, optical engineering, medical research, information technology, computers and electronic equipment, shipbuilding and salvaging, renewable energy and power.

The revival of Mumbai will mirror the strength of India as a nation, its people and businesses. The Indian economy grew at 7.6 per cent in the September quarter from a year earlier, highlights strong fundamentals and economic planning that has helped the country absorb the effect of the global recessionary conditions. The benchmark Sensex too has maintained its ground at about 9000 level since the markets were opened today for trading - Reasons good enough for other economies to remain focused on their growing trade with India.