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HVK Archives: Soaring in adversity

Soaring in adversity - The Indian Express

T.V.R. Shenoy ()
June 3, 1998

Title: Soaring in adversity
Author: T.V.R. Shenoy
Publication: The Indian Express
Date: June 3, 1998

The Finance Minister hasn't taken any cognisance of sanctions,"
Sharad Pawar buffed from the steps of Parliament House after the
Budget was presented. "We regard it as an interim Budget. "With
minor changes, the same note was struck the rest of the
malcontents on the opposition benches.

All this shows, I think, that the art of thinking on one's feet
is a dying art. Most of the esteemed gentlemen in the not-so-
loyal opposition had evidently prepared their reactions well in
advance - probably the evening of May 11 or soon after and were
just too lazy to change them afterwards.

Are the threatened sanctions indeed ide-ranging=94, the rather
wild claim by the Janata Dal's Jaipal Reddy? And if so, why are
various multinational corporations seemingly more worried than
the finance ministry?

Oddly enough, foreign businessmen agree that tough sanctions
could be imposed. But they seem to believe that it shall be
India which shall be putting up those barriers, not the other way
round. And now their governments too appear to be changing their

As you probably remember, several nations reacted rather strongly
to Pokharan II. Some of them even went to the extent of recalling
their emissaries, which is a very strong statement in the milk-
and-water language of diplomacy. So I found the recent actions of
two such countries very interesting indeed. I won't name them.
Let us just call them country 'X' and country 'Y'.

Three days before the Budget was presented, the Number Two in the
embassy from 'X' called on somebody in the Prime Minister's
Office. He said, as tactfully as he could, that he hoped India
wouldn't discriminate against private firms from 'X'.

The case of the emissary from 'Y' is even more instructive. This
was one of those nations that recalled its ambassador "for
consultations", an act that was faithfully reported by the media.
It appears the "consultations" didn't take too long, and he came
back to Delhi without the fanfare marking his departure.

To begin with, he wanted to meet the Prime Minister. When that
didn't work out, he said anyone in the Union Cabinet would do.
When they proved to have other engagements, it seemed that a
meeting with the foreign secretary at least would suffice.
Apparently, the only man in Delhi who can make time for the
ambassador from 'Y' just now is the joint secretary in charge of
the relevant area.

Pardon me, but all this doesn't exactly foretoken the ide-
ranging" sanctions feared by Jaipal Reddy. One might even
describe them as "interim" sanctions. If, that is, they exist at

But let us assume, as a purely academic exercise, that though
sanctions are indeed imposed on India. Could the Indian
government and the Indian people cope with them? Well, the simple
answer is that we have been handling sanctions for the last fifty-
years and doing a pretty good job of it too.

Using economic carrots and sticks to influence India's defence
policy isn't something that began in the wake of Pokharan II. It
started as far back as October 1947, when Pakistani raiders
invaded the Kashmir valley.

There was an immediate outcry for supplies. The biggest shortfall
was of petrol and diesel. Investigation later threw up the fact
that the lacuna was man-made - a foreign company had proved
reluctant to provide the supplies and there was no Indian firm to
step in.

An aghast government vowed that they would never be caught in
such a hole again, and decided to set up an Indian owned and
Indian-operated oil refinery. In the first such display of
undeclared sanctions being applied, no European or American firm
was willing to supply the technology. When it was ultimately set
up, the Digboi plant had less than cutting edge machinery.

It proved to be a precursor of what was to come. If oil is one of
the key ingredients for industrialisation, steel is definitely
another. But here again every western nation made one excuse or
the other about transfer of technology. India could apparently
buy steel, but not make it.

The Soviet Union stepped in with some rather cumbersome
technology, and that is how the Bhilai steel complex came into

Only when their hands were forced, did the First World step in -
the Germans in Rourkela and the British in Durgapur.

Forty years later, India was seeking something several
technological generations removed from steel and oil -
supercomputers. The US government prohibited sale of the Cray
supercomputer on the grounds that it could be used to design
nuclear weapons. Today, Indian scientists in Pune have made their

Even if the Cray could have been used for military purposes you
can scarcely make that claim about small cars. Maruti was a major
headache for Indira Gandhi when she returned to power in 1980.
She desperately wanted to make a success of it for the sake of
Sanjay Gandhi's memory. He, despite all the soft loans and other
perks, had made a pig's breakfast of the whole "Peoples Car"

Yet none of the acknowledged American, European, or Japanese
giants proved willing to give a hand. That is how Suzuki Motors,
then and even now a very small player in the global automobile
market, managed to enter the Indian market.

Western nations have now found something else to worry about. Not
only is India producing technology on its own, but managing to do
so at costs well below those in Europe or the United States. Let
me give two examples.

Tritium is commonly used in fusion reactions. Indian scientists
somehow managed to produce it at a price that is less than two
percent of what it costs in the United States. And a nuclear
plant in Rajasthan retrofitted itself at one-fifth of what it
comes to elsewhere in the world. In some areas, at any rate,
India, hasn't just matched the west but moved well ahead,

If you are still worried about the effect of sanctions, mull over
one final fact: the immense difference between the Indian and the
Pakistani reactions to the threat of sanctions. Has India
curtailed fundamental rights, or shut banks and stock markets, or
clamped down indefinitely on foreign currency transactions?

Both Pakistan and India have long been subject to informal
sanctions. Pakistan spent its time looking for loopholes, buying
equipment on the sly. (It got vacuum pumps for uranium enrichment
>from Germany, zirconium from Americans, Chinese designs.... )
India has traditionally preferred to stand on its own, building
for itself what it is denied by anctions'.

"Wide-ranging" sanctions? Having been denied access for
everything from steel and oil to computers and cars, they are
really nothing new.

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