Impact of Terrorism on Exclusive Indian Economy

The objective of this study is to investigate at what extent Indian economy becomes the victim of terrorism activities. However, we didn’t find any comprehensive study on this issue, who used time series data for casual investigation between terrorism and economic growth. This study used time series data from 1994 to 2017 to examine the impact of terrorism attacks and their impact on Indian economy. The data analysis has done through auto regressor distributed lags (ARDL) method. The long run results revealed that terrorism, interest rate and unemployment have negative impact on economic growth, whereas net trade and foreign direct investment have positive impact on growth level. While in short run only terrorism has negative relationship on Indian economy and rest of all variables are statistically significant. Furthermore, error correction mechanism and stability tests indicate that model is consistence and efficient. The overall results through F-test concluded with these remarks that model is statistically significant