As much as $9 billion of India‘s GDP is at risk from conflicts and terrorism annually. Delhi, Mumbai and Bengaluru are among the top 10 cities globally most at risk, according to Lloyd’s, a global specialist in insurance and reinsurance market. The latest edition of Lloyd’s City Risk Index (CRI) released today measures GDP at risk from 22 threats in 279 cities across the world. These cities were chosen as they are the key engines of global economic growth, with an estimated combined economic output of $35.4 trillion (equivalent to 41 per cent of global GDP).

Risky Indian cities

According to the study, Delhi (5th) and Mumbai (7th) are in the global top 10 for GDP at risk attributed to civil conflict. “The findings for India reflect the geopolitical tension in the region,” it said.

Lloyd’s CRI included 10 cities in India: Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kanpur, Kolkata, Mumbai, Pune, and Surat.

Delhi has the largest GDP@Risk of all Indian cities at $3.5 billion and is also the highest-ranked city in South Asia. It is closely followed by Mumbai at $3.1 billion. Civil and inter-State conflicts are the top two threats for each city, while Kolkata has tropical windstorm as its key threat.

Lloyd’s said other threats that feature prominently for India’s cities include human pandemics and floods, posing an estimated $1.7-billion and $1.3-billion GDP@Risk for the country, respectively.

While the CRI calculates GDP at risk on an average annual basis, it also assesses the estimated cost to each city’s GDP if a particular threat scenario occurs. For Delhi, this reveals that an extreme inter-State conflict scenario could cost the city $225.2 billion and that an extreme flood or civil conflict could cost $122 billion or $72.3 billion respectively.

Extreme inter-State conflict is also the costliest threat scenario for Ahmedabad and Mumbai, while an extreme civil conflict scenario would be costlier for Bengaluru, Chennai, Hyderabad and Kanpur. For Kolkata, the costliest extreme scenario is a severe earthquake, which could cost $74.4 billion– more than double the city’s annual GDP of $32.6 billion, it added.

Global risk

The 10 cities with the highest exposure to risk globally could together lose $126.8 billion each year, almost a quarter of all GDP@Risk, a finding that reflects the increasing concentration of wealth in certain geographic regions. APAC accounts for half the cities in the top 10 cities at risk, and three of the top five (No 1 Tokyo: $24.31 billion; No 3 Manila: $13.27 billion; and No 4 Taipei: $12.88 billion). New York is at the second spot at $14.83 billion.

Climate-related risks together account for $123 billion GDP@Risk globally, and this sum is expected to grow as extreme weather events become increasingly frequent and severe. Tropical windstorms, with a total estimated loss of $59.1 billion each year, are the largest threat to the GDP of APAC’s cities.

The index also scores each city’s resilience based on criteria such as funding for emergency services and insurance levels. Of the 92 cities the index analyses in APAC, 16 are categorised as having very strong levels of resilience. This includes all Japanese, South Korean and New Zealand cities.

However, 19 cities receive the lowest level of very weak. This includes all Indian and Pakistani cities. If all APAC cities included in the index were to achieve the highest resilience rating of very strong, then the GDP@Risk in the APAC region would decrease by $34 billion.

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