Multinational companies fear that fresh investments in the South Asian region might get adversely affected as a result of the escalating tension emanating from nuclear tests by Pakistan yesterday close on the heels of similar tests by India.
US, Japanese, Korean companies say that they would have no option but to relook their investments plans for the future in this region. A senior Samsung executive based in Delhi said: "As a result of this situation, the investment climate in the future for corporates like us will definitely get effected. The consumer confidence level in this area is very low and economic sanctions in this region will effect demand which is a matter of great concern for companies like us".
Echoing a similar view Japanese car maker Honda Motors, which did not expect Pakistan to conduct nuclear tests, says that they have to reassess fresh investments in South Asia. A senior executive in Honda in Delhi said: "We did not expect this test (by Pakistan )to happen, but overall companies like us have to do a serious homework on future investments in this region. The investment climate will definitely get effected".
US companies in Delhi are also grappling with the problem of trying to convince their headquarters that nothing is amiss in this region.
A senior executive of a chemicals major based in the US said that fresh investments could come under closer scrutiny by their headquarters. "We in the Indian office are finding numerous questions being asked on the security in making investments in this region. There are always detractors at our head office who are saying that why put in our money in an area were an arms race might just be on the corner. Earlier we had said don't worry its business as usual in India but now with the Pakistan test what do we tell our headquarters. We have investments in both the countries."
A senior executive of US channel Discovery India said that investments could get effected in the near future if anti multinational incidents after the nuclear tests spread in more places in the country and also in Pakistan. " If the various incidents like the burning of Pepsi trucks and Baskin Robin outlets in Gujarat spread in more parts of India and also in Pakistan there might be a reassessment of investments by multinationals in South Asia".
