The recent unfortunate episode of terrorist attack in Mumbai has implanted fears in the minds of the economist that this will badly put affect India's image as an investment destination. This comes in times when the country was trying hard to shore up its depleting foreign exchange reserves.

HDFC chief economist Abheek Barua informed, "Terror strike is likely to have a significant and tangible impact on the economy. This would damage India's image because institutions like hotels are closely associated with business. In short-term, it would impact the stock markets and in the long term it may affect India's image as an important investment destination."

The terror strike, which hindered the normal working in the financial capital of the country, also affected the India's stock markets, forex markets and commodity exchanges, which remained closed today.

The terrorist, who have attacked key hotels like Taj, Oberoi and Trident, have taken over 100 lives of innocent people till now.

ICRA vice-chairman and Group CEO P K Choudhury said, "In the short term, there will definitely be some panic, fear and apprehensions." He also added that there will be some impact on investment flows.

"However, in the long run, business will be again back on the track... Mumbai is the business hub and will continue to remain so," he added.

"It is a time for consolidation, support and solidarity in the country and across the border. Terror strikes in the financial capital come at a time when India is battling the impact of the global financial meltdown which has resulted in depletion of foreign exchange reserves by over $60 billion during the current financial year," former Reserve Bank Governor and presently Rajya Sabha member Bimal Jalan expressed.