Recently, Ratan Tata, chairman of the Tata group of industries, said during a television programme that in the eventuality of a large-scale war breaking out, there are certain industries that are likely to experience a boom. He mentioned the steel, leather, textiles and shoe industry, in particular.

Sceptics, however, feel that the Indian economy is not really in a good state at present, and if war does break out, a majority of development projects currently on will have to be abandoned, whether in leather, textiles or shoes.

``The point is that Indian industries have never had a direct role to play in the needs of the armed forces, with the result that often they do not have the expertise to deal with situations like a large-scale war,'' says a consumer product consultant,who does not wish to be named.

For instance, when the shoe industry is looked at, there may not be much of a boom, say sources in the shoe industry. According to Adarsh Gupta, managing director, Liberty Shoes, in the short term, there will not be much effect on the shoe industry. However, if the conflict gets prolonged, the industry might be affected to some extent. ``If the need arises, then with the kind of infrastructure available, we will be there to help our armed forces. Actually, we have been getting enquiries about safety shoes, which are made using a special technology, which is not available everywhere,'' says Gupta.

``But if we are asked to provide shoes for the forces, we will do our best.''(The consumer product consultant says that due to paucity of funds and political instability in the country, several projects, including expansion of power projects, have been abandoned already and may not pick up over the next couple of years.)

According to sources in the textile industry, war is notgoing to play a significant role in the escalation of their business. Basically, the export market will not really be affected, say sources in the sector. But then it all depends on India's continuing relations with other countries, they add.

According to an analysis carried out by the Associated Chambers of Commerce and Industry of India (Assocham), the Sensex, which has already crossed 4000 points, is expected to jump significantly and maintain high levels unless the fiscal deficit goes out of control because of Kargil.

And, if war does break out, no foreign investor will be willing to invest in the country, says the Assocham analysis. They explain that if war clouds do loom large on the Indian horizon, all funds will have to be diverted to defence purchases, and more money would have be raised. In such a scenario, no industry will actually be able to sustain itself.

On the brighter side, Sudhir Jalan, president, Federation of the Indian Chambers of Commerce and Industry (Ficci) says emphatically thatKargil will not have any impact on the inflow of foreign direct investment into the country and global investors, particularly from the US and the UK, are aware of India's strong macroeconomic fundamentals, which can attract more investments.

Adding that``there could have been some pressure, which must have led to the decline in the value of the rupee'', Jalan says nevertheless that ``the rupee will never go into a tailspin''.

Jalan says the Kargil conflict will not have any impact on the government's infrastructure development plans. These will take place as planned and there is no question of the economy dithering because of Kargil.

Another industry that may profit from a war is the steel industry. Sources in the industry say that in case war breaks out, the industry might be asked to put together the resources and provide shells for the bombs, steel for the tanks and other equipment.

``Wherever there is infrastructure, the steel industry is not likely to be affected,'' says P K Mohan, manager,Corporate Communications, Jindal Steels.There will be minor fluctuations in the stainless steel market and 70 per cent of the stainless steel used for utensils will be affected, adds Mohan.

Sources in Dabur Industries Ltd, which deals in medicines and food products, say that the Indian economy may not really be affected, provided the conflict does not spread any further. But if it does, then all industries are likely to be affected because the country will naturally be politically unstable. According to the Dabur sources, in case there is a large-scale war, Dabur will always be ready to pool in its resources and help the armed forces.

The onset of a good monsoon this year is likely to further boost the capital market. The continued signals abroad that Indian companies are doing well in will also help in creating a conducive environment for the capital market to flourish in and the impact of Kargil will be negligible, concludes the Assocham analysis.