Mumbai accounts for nearly 5% of the India’s US$ 1 trillion (Rs 49.9 trillion) GDP and contributes one-third of its direct tax colletion. However, the recent terror attacks on the city (which as we write this is still underway) has jolted the confidence in the entire nation. The city of Mumbai is not new to terror attacks and has seen eight major terrorist attacks in the past 15 years. However, what makes matters worse in the latest case is the fact that it has come at a time when the economy is withstanding a global recession.

Already reeling under the impact of the economic meltdown, domestic as well as international travel to the country is set to take a huge impact of the terrorist assault on Mumbai, particularly on two of its most popular luxury hotels. Travel companies expect businesses to fall at least 25% to 30% in December, which is otherwise the peak of the busy travel season. To put things in perspective, November to January constitutes 50% of total inbound tourist flow into the country. Making matters worse is the fact that even business and work-related travel to the country is likely to get affected with most MNCs discouraging their employees from visiting the country in the near term