HVK Archives: India adopts a take-it-or-leave-it policy towards foreign
India adopts a take-it-or-leave-it policy towards foreign - The Times of India
Anita Katyal
()
May 15, 1998
Title: India adopts a take-it-or-leave-it policy towards foreign
investors
Author: Anita Katyal
Publication: The Times of India
Date: May 15, 1998
An unfazed Indian government appears to have adopted a carrot and
stick policy to counter the adverse international reactions to
its decision to conduct nuclear tests.
On the one hand, it plans to approve pending foreign investments
and, on the other, it is sending a clear signal that if the U.S.
and other foreign firms do not wish to do business with India, it
will approach other countries instead. "The effort here is to see
that private -foreign investors, particularly in the U.S., are
sufficiently lured by the huge Indian market to step up pressure
on their government to go slow on India," sources in the Prime
Minister's Office (PMO) maintained.
The contours of this strategy were discernible, with the ministry
of mines granting a prospecting licence to the U.S.-based firm
M/S Phelps Dodge, one of the largest global players in copper
exploration.
A press release put out by the ministry said that the U.S. firm
had been granted permission to prospect "copper and associated
minerals in the state of Bihar". It also pointed out that Phelps
Dodge had been given approval for setting up a 100 per cent
subsidiary company in India for exploration, mining, refining and
smelting of metals. Coincidentally, Indian Airlines officials
also detailed how they were currently in the process of
finalising the acquisition of six 50-seater planes and
replacements for the airline's fleet of 10 A300s and 12 Boeing
737 aircraft.
Though not saying anything directly, the underlying message was
obvious - if the U.S.-based Boeing did not wish to do business
with India, the two contracts could well go to Airbus Industrie
in France.
Indian Airlines officials disclosed that the choice for the six
50-seater aircraft, estimated to cost Rs 400 crore, was between
ATR-42s and Dash 8-300 aircraft, manufactured by Air Transport
Regional of France and Bombardier of Canada respectively.
The project cost of the larger aircraft is estimated at a
whopping Rs 4,000 crore. While pointing out that an in-house
committee was scrutinising this project, the airline recalled
that the last time Indian Airlines expanded its fleet, it
purchased 30 Airbus A320 aircraft for about Rs 2,500 crore.
Highly-placed government sources maintained that several pending
projects submitted by foreign investors were likely to be cleared
in the next few days. "Wait and watch...many more clearances will
be announced within the next few days," said PMO sources.
Government sources repeatedly pointed out that countries were
resorting to sanctions reluctantly, that no trade sanctions were
imposed and that the U.S. had not been supported on this issue by
its friendly allies, namely Britain and France. "The
international aid available to India constitutes only a small
component of its budgetary outlays," PMO officials said.
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