The findings for India reflect the geopolitical tension in the region, it added.
Three Indian cities, including Delhi, Mumbai and Bengaluru are ranked among the top 10 cities globally for GDP risk from terrorism threats, a recent study found out. Delhi, Mumbai and Bangalore stood at fifth, sixth and seventh in this aspect, in the latest edition of Lloyd’s India’s City Risk Index (CRI). The study further noted that threats from conflict and terrorism account for more than half (58 per cent) of the risk to India’s economic output annually amounting to USD 9 billion. Delhi (fifth) and Mumbai (seventh) were also in the global top 10 for GDP risk attributed to civil conflict.
“While India is fast becoming one of the most diverse and largest growth economies in the world, there is some concern that this may be undermined by a rising spate of conflict in the region,” Lloyd’s India country manager Shankar Garigiparthy said quoting the latest edition of reinsurer’s ‘City Risk Index (CRI)’.
India, he said, faces complicated and costly threats from subversive groups as well as from the complex relationship with its neighbours. Lloyd’s City Risk Index (CRI) has measured GDP risk from 22 separate threats in 279 cities across the world. These cities were chosen as they are the key engines of global economic growth, with an estimated combined economic output of USD 35.4 trillion (equivalent to 41 per cent of global GDP).
The findings for India reflect the geopolitical tension in the region, it added. Lloyd’s CRI included 10 major cities in India, Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Kanpur, Kolkata, Mumbai, Pune and Surat. It said, Delhi has the largest GDP risk of all Indian cities at USD 3.5 billion and is also the highest-ranked city in South Asia.
It is closely followed by Mumbai at USD 3.1 billion, it added. Civil conflict and interstate conflict were the top two threats for each city, except Kolkata which has tropical windstorm as its largest threat, it said. Other threats, which featured prominently for Indian cities include human pandemics and floods, posting an estimated USD 1.7 billion and USD 1.3 billion GDP risk for the country respectively.
For Delhi, the CRI revealed that an extreme interstate conflict scenario could cost the city USD 225.2 billion and that an extreme flood or civil conflict could cost USD 122 billion or USD 72.3 billion respectively. With Delhi’s overall GDP at USD 108.5 billion, an extreme interstate conflict or flood could cost more than the city’s overall annual economic output, it added.
Extreme interstate conflict is also the costliest threat scenario for Ahmedabad and Mumbai, while an extreme civil conflict scenario would be costlier for Bangalore, Chennai, Hyderabad and Kanpur. For Kolkata, the costliest extreme scenario is a severe earthquake, which could cost USD 74.4 billion, more than double the city’s annual GDP of USD 32.6 billion.