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CNN Live At Daybreak

Indian Economy Suffers from War Prospects

Aired June 03, 2002 - 06:35   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: The prospects of a nuclear war over Kashmir are already sending shockwaves through India, and the economy is an early casualty.

More on this from Suhasini Haidar in New Delhi.

(BEGIN VIDEOTAPE)

SUHASINI HAIDAR, CNN CORRESPONDENT (voice-over): Leaving no one behind, diplomats, staff, and tourists are making their way home after the United States and many other countries warned that tensions between India and Pakistan could get out of control. The immediate casualty: tourism.

AMIT MITRA, INDIAN CHAMBER OF COMMERCE & INDUSTRY: India was skipping forward its major historic sites that were being visited by international tourists, there is a pause, and we are hoping that as this tension goes down, it will pick up.

HAIDAR (on camera): In fact, this tourist season, arrivals were down 20 percent ever since the two countries massed their troops along the border raising fears there may be war. Here in one of Delhi's major tourist districts shopkeepers say business is hurting.

(voice-over): Ask Manav Wadhawan, who says he used to get up to 100 customers each day. Now, he says, he sees fewer than ten.

MANAV WADHAWAN, SOUVENIR SHOP OWNER (through translator): There are threats of a nuclear war. People feel they may get nuked here, so they all are going back.

HAIDAR: Stock markets have fallen, exports are lower and potential investors are staying away. And there is another cost to bad relations with Pakistan. Business analysts say for every dollar of direct trade between India and Pakistan, the government and people of both nations lose $3 to indirect trade and smuggling. They say the $600 million direct trade relationship is being held hostage to tensions.

MITRA: There is always two steps forward and unfortunately, due to tensions and insecurity, one step backward. The potential is just immense.

HAIDAR: At a candlelight vigil for peace, activists say the money spent on this conflict could be better used feeding the people in both countries.

AHUNDHATI ROY, AUTHOR: We have had a million men facing each other on the border for days, and for seven months I think now, at huge costs to this nation. You have nuclear weapons, which are very, very expensive.

HAIDAR: And at this rally at least, a fervent hope that the leaders of India and Pakistan recognize that peace may be cheaper. But even as they pray for peace, the reality of war continues to scare people into leaving the region.

Suhasini Haidar, CNN, New Delhi.

(END VIDEOTAPE)

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