Soaring in adversity

Are the threatened sanctions indeed 8220;wide-ranging8221;, the rather wild claim by the Janata Dal8217;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 theirgovernments too appear to be changing their tune.

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 won8217;t name them. Let us just call them countryX8217; and country Y8217;.

Three days before the Budget was presented, the Number Two in the embassy from X8217; called on somebody in the Prime Minister8217;s Office. He said, as tactfully as he could, that he hoped India wouldn8217;t discriminate against private firms from X8217;.

The case of the emissary from Y8217; is even more instructive. This was one of those nations that recalled its ambassador 8220;for consultations8221;, an act that was faithfully reported by the media. It appears the 8220;consultations8221; didn8217;t take too long, and he came back to Delhi without the fanfare marking his departure.

To begin with, he wanted to meetthe Prime Minister. When that didn8217;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 Y8217; just now is the joint secretary in charge of the relevant area.

Pardon me, but all this doesn8217;t exactly foretoken the 8220;wide-ranging8221; sanctions feared by Jaipal Reddy. One might even describe them as 8220;interim8221; sanctions. If, that is, they exist at all8230;

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 India8217;s defence policy isn8217;t something that began in the wake of Pokharan II. It started as far back as October 1947, whenPakistani 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 manmade 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 rathercumbersome technology, and that is how the Bhilai steel complex came into being. Only when their hands were forced, did the First World step in 8212; 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 own.

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 Gandhi8217;s memory. He, despite all the soft loans and other perks, had made a pig8217;s breakfast of the whole 8220;People8217;s Car8221; project.

Yet none of the acknowledged American, European, or Japanese giants proved willing to give a hand. That is how SuzukiMotors, 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 hasn8217;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 currencytransactions?

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 8230; India has traditionally preferred to stand on its own, building for itself what it is denied by sanctions8217;.

8220;Wide-ranging8221; sanctions? Having been denied access for everything from steel and oil to computers and cars, they are really nothing new.