The BJP government's nuclear explosions in 1998 upset the United States. Then it put its finance minister, Jaswant Singh, on active duty to restore the mutual relations. His efforts succeeded to a great extent. In this piece in Business World of 5 February, I argue that the time had come for the government to use its renewed good relations and stop proposed US legislation which would have stopped US government's information technology work from being done in India. The amendment was defeated.
Show us your clout!
We do not know about champagne, but euphoria overflowed
during Foreign Minister Yashwant Sinha’s recent visit to Washington: he met
President Bush twice in a day! Well, all right, one of the meetings had been
planned weeks ahead and involved handshaking and smiling for the photographers
in the main. But the other one was off the programme: George W walked into
Condoleezza Rice’s room while she was holding important talks with Mr Sinha, and
stayed around for a quarter of an hour. The double feature made front pages in
India and swelled patriotic Indians’ chests with pride. At last India was not
only shining but it had arrived, they thought.
Although it is all too easy these
days to make Indians feel good – and may they feel ever more good – their
perception is not entirely wrong. India has moved up in America’s estimation.
Many small things have contributed. The most important is the connection the US
information technology industry developed with India. First it ran short of
programmers and imported them from India. Then US-trained Indian engineers
started making and exporting software themselves. Today, American firms are
coming to India in droves to take advantage of its well trained technical
manpower. And they are telling American politicians that India is not such a
bad country.
Then there was the protracted
courtship begun by Jaswant Singh after the nuclear explosions of 1998.
Convincing the US that India had changed and was now prepared to be an ally was
the best strategy for us if we were to avoid the dire isolation of Libya or
North Korea; Jaswant Singh’s achievement was that he carried conviction. The
rise of China and the failure of Japan to rise to its full height may have made
the US more prepared to take another look at India. Still, Mr Singh did a great
job of covering up the warts and presenting India as a ravishing beauty.
Finally, there was 9/11 and the
consequent unleashing of Islamophobia in the US. India’s offer to help in the
invasion of Afghanistan carried little risk since Pakistan was sure to make
such help impossible. But it signified a huge departure from India’s usual
posture of sitting on its haunches and spitting at all who passed by. The US
actually believed us – so much that it asked us to repeat the offer when it
came to Iraq. This time we hummed and hawed, but stirred ourselves just enough
to suggest that we were not saying no – that the BJP had elections to fight and
could not afford to lose the Muslim vote right then. We consulted Iraq’s
neighbours, and said we were only waiting for a UN intervention. The excuses
were too transparent – which is why the entire BJP brass from Prime Minister
down has to rush frequently to the US and repeat them – including Yashwant
Sinha.
It is a moot point whether all
these visits show increasing closeness or frantic attempts to get close to the
US. It is doubtful whether India has acquired clout with the US or the US with
India. Now an opportunity has arisen for the government to show that it is not
Bush’s poodle, that it has real clout.
The US Senate passed a bill on
January 23 which would be called a vote on account in this country: it
authorized the US government to spend $328 billion till September 2004. as is
common in the US, a senator slipped in a section in the bill which would
prohibit IT companies that get federal contracts to outsource work outside the
US. If passed, it would prevent federal contractual work – which stretches from
inland revenue records to medicare account-keeping – from coming directly or
indirectly to India. A number of US states have passed similar provisions; but
this is the first time the threat has arisen in Washington. And the sums
involved are far more substantial.
The threat strikes at India’s
most vital economic interests; and it is patently unfair. Almost a third of
India’s software exports are made by foreign, mostly US firms; even they will
not be able to take on federal contracts. If the US bans our software
companies, there is no reason why we should not ban US investment (although
that would only be cutting our nose to spite our face). Thus, the senate move
can be the beginning of progressively worsening relations between the two
countries.
That is why the government should
pull out all stops to combat this threat. The ban has just passed the Senate;
it is still to pass the House of Representatives. But it could do so quickly;
then it will be too late. Now is the time for Yashwant Sinha to cash in on all
his valuable contacts in the White house. Now is the time for Prime Minister to
call up all the Congressmen (the American sort) who have called on him, and to
tell them he minds. Now is the time for BJP ministers to call up the US
corporations that have invested in India and tell them that Indian hospitality
calls for some small recompense.
