Tensions Mount in India

Robert Hsu, January 02, 2009

As 2008 drew to a close, geopolitical tensions were on the rise. Asia, in particular, felt the effects of these tensions as a number of nations in the region were victim to conflict or terrorist attacks.

India was one of the most recent countries to fall victim to terrorist attacks. In December, terrorists attacked several locations in Mumbai. India blames Pakistani militant groups for the attacks, while Pakistan denied any involvement.

As a result, tensions have escalated between the two countries, and now India and Pakistan are amassing troops along their borders. Despite the seriousness of this situation, this conflict comes as no surprise. There is a lack of economic, military, social and political stability in India, and this situation is only another testament to that.

As you might of guess, this type of situation does not bode well for India in 2009. Especially when you consider that India was one of the hardest hit nations in the world this year as the global economic crisis unfolded. The continuing instability in India will only weigh more heavily on the country's economy and drag down its stock market.

And that's why I continue to expect India to battle serious economic problems in 2009. It's anyone's guess to how India's feud with Pakistan will turn out, but there is one thing that I know -- there is no quick-fix to all of India's troubles.

So it's going to take some time for my outlook on India to improve, and until then, I recommend avoiding investments in the country.

To stay up to date on what's happening in India -- and Asia -- become a member of Asia Edge today!

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