Analysis

It has been seven hours since AK-47-toting gunmen started shooting up five-star hotels in a cosmopolitan district of Mumbai, India. This has now evolved into an attack where the lives of high-value targets, whether they be diplomats or Western corporate executives, are being threatened. With general elections nearing and a global economic crisis in full effect, this is a nightmare situation for India’s already weak and fractured government as it attempts to hold onto the Western investment that has fueled the country’s growth for more than a decade. For the more immediate future, however, this attack has the potential to spin up into a crisis of geopolitical proportions along the Indo-Pakistani border.

Tactical Situation

The crisis is still in full swing with reports indicating that, along with earlier attacks carried out by gunmen on Mumbai’s central train station, a popular cafe and a theater, hostage situations have developed in two of the city’s most prestigious hotels — the Oberoi and the Taj Mahal — as well as in Cama Hospital and the Chabad House, where Jews and Israelis are currently being held hostage. Stratfor sources have said that the attackers approached their targets in boats with Pakistani markings; other sources have said the boats might have been registered in Karachi, Pakistan.

Eyewitnesses are reporting that approximately 200 people were being held in the Taj Mahal hotel, although 50 have since been released. Another eyewitness reported that the militants in the Taj were seeking out American and British passport holders, so it is possible that the 50 who were released were non-Westerners who did not fit the militants’ hostage profile. Occupants in the Oberoi, Cama Hospital and Chabad House are still being held, with a rumor circulating that Jews in the Chabad House are being killed.

The attack appears to be an extremely sophisticated operation with up to nine target sets hit. The targeting of the two hotels (both five-star and considered the finest in Mumbai) shows that the militants were going after foreign VIPs. So far, we know that three Indian members of parliament, a small number of European and Australian diplomats and several Indian corporate executives were caught in the Taj hotel. We do not have a list of other foreigners who are there, but these hotels are where Western executives and government officials would stay, making them valuable quarry for militants seeking to attract international attention. By targeting the Chabad House, the militants (who are almost certainly Islamist) targeted Jews and Israelis, possibly indicating the involvement — or at least a call for recognition — of transnational jihadist organizations linked to the al Qaeda franchise. These hostages would be considered high-quality because they are foreign and represented by world powers that can put pressure on India. On top of this, the apparent willingness on the part of the militants to die for their cause means their hostages are at serious risk. This will attract attention from powerful players all over the world.

Geopolitical Ramifications

India’s ruling Congress Party is under enormous pressure to act decisively. In past attacks, including the 2006 Mumbai railway bombings, condemnations were issued and Pakistan was accused of backing militants, but retaliatory action was never taken. Moreover, peace talks between India and Pakistan would proceed as planned just days after the attack.

Given that this attack involves a number of high-value targets and cuts into India’s economic lifeline, this is not an attack the Congress Party can fail to respond to. The main opposition Hindu nationalist Bharatiya Janata Party (BJP), eyeing an election victory in 2009, will use this as an opportunity to condemn Congress for being soft on terrorism and likely call for a vote of no confidence to spur early elections.

We still need to watch how the Indian public, parliamentarians, Cabinet members and national security officials react to this attack, but we can bet that the reaction will be fierce and chaotic. If Congress does not want to fall from power, it has the option of stirring up a national crisis with Pakistan to try and get India to rally around the government and demonstrate to the Indian people that the government is taking action to protect them. This is an action the BJP took when it was in power in 2001 following a major terrorist attack on the Indian parliament in Mumbai, leading the United States to intervene to prevent tensions with Pakistan from becoming a full-blown nuclear crisis.

This could happen regardless of what the actual linkage to Pakistan is in this attack. As Stratfor has explained previously, the connection between the Islamist militant groups operating in India and their Pakistani handlers has become a lot murkier since 9/11. Lately, India has become more cautious in responding to attacks, realizing that it hurts its credibility to immediately blame Pakistan as soon as an attack occurs, especially when it appears that militant groups have become a lot more autonomous and homegrown in nature.

Pakistan has its plate full in dealing with its own jihadist insurgency and a major economic crisis. With its troops already preoccupied and the government busy fighting among itself, Islamabad is unlikely to be itching for a fight with the Indians along the Kashmir border when it knows it would be severely outmatched.

The United States, meanwhile, is in political limbo with the transition taking place between U.S. President George W. Bush and President-elect Barack Obama. Without a clear U.S. mediator in place to calm tensions along the Indo-Pakistani border (a role the United States has traditionally shouldered), the aftermath of this attack could rapidly spiral out of control.

Whether the Congress Party seizes this option is another story. The Indian government is more likely to collapse following the attack than it is to come up with a coherent policy against Pakistan. But even in the case of regime change, the likelihood of an Indian-Pakistani crisis is still strong. Should Congress fall, the BJP will likely take its place and will be expected to follow through on its commitments to take a harder stance against terrorism. With Pakistan wracked by a jihadist insurgency, on the brink of bankruptcy and in political chaos, it just might make an easy target for destabilization, in New Delhi’s view.