The car parts plant on the outskirts of the Indian capital where chief executive Lalit Chaudhary was clubbed to death last week by a vengeful mob of dismissed workers is deserted these days.
The owners of Graziano Trasmissioni India, part of an Italian multinational, are still mulling whether to keep the plant open after 47-year-old Chaudhary was lynched by an iron-bar-wielding gang who chased him through the plant.
The brutal killing has triggered a flood of condemnation from Indian industry officials.
They also fear it could have repercussions on India's drive to lure foreign investment — especially after the labour minister appeared to justify the attack, calling it a “warning for management” to treat workers with compassion.
“Nothing in the world that can justify lynching of any person and no dispute can be settled by murdering an adversary,” said Rajeev Chandrasekhar, president of the Federation of Indian Chambers of Commerce and Industry.
The death of Chaudhary, victim of a long-running labour dispute over pay and other issues, has thrown an unwelcome spotlight on the difficulties of doing business in India as the still heavily agrarian nation transforms from farms to factories, industrial parks and enterprise zones.
The Italian embassy said threats to the plant “had been repeatedly brought to the attention of the competent Indian authorities” but nothing was done.
India already has enough investment horror stories without any more bad publicity.
Observers cite a slew of examples — chiefly, the violent land row pitting farmers against Tata Motors that looks set to force the auto giant to pull out of West Bengal state, where it was due to roll out the world's cheapest car.
The events in West Bengal “will unleash fear and uncertainty in investors — Indian or foreign,” N.R Narayana Murthy, chairman of Infosys, India's second-biggest outsourcer, commented recently.
The row embroiling the Tata Group has sparked concern among Indian firms because the Tata Group is regarded as one of the country's most socially responsible due to its raft of social programmes.
Other mega projects around the country like South Korean steel giant Posco's 12-billion-dollar steel-and-power plant in eastern Orissa state have been stalled by a mix of land acquisition and environmental disputes.
And British-listed Vedanta Resources' proposal to mine bauxite to feed a 900-million-dollar aluminium refinery, also in Orissa, has come up against stiff opposition from tribals who say the company is building on sacred land.
There have also been deadly clashes over India's plans for Special Economic Zones, touted by the government as a way to woo foreign investors and spur economic growth and job creation.
“Indian society is passing through a revolutionary kind of situation where every section of the community is seeking to express their voice,” said T.K. Bhaumik, economic advisor to Indian industry lobby Assocham.
“It's democracy to the boiling point,” he said.
Still, India looks set to remain the world's second most preferred global location for foreign investment behind China, at least for the next couple of years, according to the latest UN World Investment Report, released last week.
Foreign direct investment (FDI) inflows will continue to be robust despite the global financial crisis expected to impact economies across the world, the report forecast.
India expects to draw 35 billion dollars in FDI in this financial year.
“Investors are attracted by India because of the spurt in economic growth — averaging 8.8 percent in the last five years — and the continuing strong growth prospects,” while economic expansion globally slows sharply, said Deepak Lalwani, India director at London's Astaire & Partners.
“There is just this huge bottom line about India — that high economic growth and a huge population equals huge markets,” Lalwani said.
“Investors just have to choose carefully,” he warned.
