India and big business

Complicit in Modiʹs Hindu nationalist agenda

Having re-invented himself politically following the Gujarat porgroms of 2002, Narendra Modi has – to the delight of big business – consistently pursued a tough line in market-driven economic policy. Buoyed by this support, the Indian Prime Minister is now intent on realising a darker agenda of discrimination and repression. By Dominik Muller

The Constitution of India came into force on 26 January 1950. It is considered one of the most progressive democratic constitutions in the world and contains robust provisions for the protection of minorities. 26 January is one of the biggest national holidays in India and is marked every year with military parades and guests from abroad.

The guest of honour in 2020 is, of all people, the Brazilian President, Jair Bolsonaro. Like the Indian Prime Minister, Narendra Modi of the Indian People's Party (BJP), Bolsonaro pursues a right-wing, authoritarian, nationalist policy at the expense of minorities, while at the same time revelling in the backing of national and international companies.

Narendra Modi's career in high office began with a bloodbath. Just a few months after he took office as chief minister of the state of Gujarat, the worst pogroms of the new millennium on the subcontinent took place in early 2002: settlements were burned down, women raped, large numbers of people displaced, and more than 1,000 people lost their lives, most of them Muslims.

Numerous human rights organisations criticised Modi, saying he did nothing to stop the Hindu nationalist mob – which was made up of members of the National Volunteers' Organisation (RSS), the Universal Hindu Council (VHP) and even several high-ranking politicians in the BJP – for several days.

One year later, almost exactly twelve months after the pogroms, Modi sent out invitations to the first "Vibrant Gujarat", an international investors' summit. Company leaders from India and further afield, including the heads of Shell and General Motors, accepted the invitation. Since 2003, it has taken place every two years.

A paradise for investors

It is said that at every one of these events, over 10,000 deals are done and dozens of investors come to Gujarat's numerous special economic zones, including Hyundai, Ford and Peugeot from the car sector, German chemical giants BASF, Bayer and Lanxess, as well as their American competitor Dupont, the industrial giant Bosch and the aircraft and train manufacturer Bombardier.

Vibrant Gujarat Global Summit 2019 (source:
Seduced by the ʺGujarat modelʺ: in late 2013, just a few months before the elections that catapulted Modi into the role of prime minister, the U.S. bank Goldman Sachs published an economic forecast for India. The title alone – "Modi-fying our view" – was a none-too-subtle recommendation to the Indian electorate. It called Modi an "agent of change" that would transform India from a lightweight to a market heavyweight

With Vibrant Gujarat, Modi succeeded in creating a new image not only for himself, but also for the state of Gujarat, namely that of a paradise for investors. On the one hand, there are the double-digit growth rates. On the other: nowhere in India have small farmers been dispossessed of their land to create special economic zones as quickly as in Gujarat, and nowhere in India have strikes been nipped in the bud as effectively as they have been there.

  1. Tycoons such as Ratan Tata, who built up one of Indiaʹs biggest conglomerates and was long seen as the liberal poster boy of Indian business, now back the Hindu nationalists. Narendra Modi got Tata on his side in 2009, when he used numerous perks to persuade the Tata group to set up the production unit for the Nano, the cheapest car in the world, in Gujarat. At the time, Tata, who was chairman of the board at the eponymous mega-company in India until the end of 2012, famously said "You're stupid if you're not in Gujarat".

While economic reform in India under the previous Congress government – such as the privatisation of public property and state-owned companies, majority shareholding rights for foreign investors and the reform of labour laws – progressed far too slowly for many investors, the "Gujarat model" came in for much praise: in late 2013, just a few months before the elections that catapulted Modi into the role of prime minister, the U.S. bank Goldman Sachs published an economic forecast for India. The title alone – "Modi-fying our view" – was a none-too-subtle recommendation to the Indian electorate. It called Modi an "agent of change" that would transform India from a lightweight to a market heavyweight. It went on to say that a government led by the BJP would lead to a pick-up in investment demand.

Wiping the political slate clean

For a long time, Modi's political rise was considered virtually impossible abroad. The U.S. and several European countries considered him a persona non grata because of his role in the pogroms of 2002 and refused to grant him visas. In 2012, however, a Special Investigation Team appointed by India's Supreme Court cleared Modi of complicity in the violence. According to critics, this decision came about "thanks to the suppression of a huge pile of incriminating evidence by the Supreme Court-appointed special investigation team (SIT)", as the Times of India put it.

When he was named the BJP's top candidate in September 2013, the incessant stream of visits from business and political delegations from abroad began. Bernhard Steinruecke, head of the Indo-German Chamber of Commerce (the biggest German chamber of commerce abroad, representing more than 1,000 companies) is convinced that Modi is innocent. After all, he says, "India is a democracy and a state governed by the rule of law", adding that this is why its judgements and its courts are pioneering.

Not far from Steinruecke's office in the Maker Tower, one of the skyscrapers that towers over the impressive Mumbai skyline, is the largest single-family house in the world. It stands 27 storeys high and boasts 600 servants and three helicopter pads. It is the home of one of Modi's most important allies and backers, Mukesh Ambani, and his family. Ambani is a multi-billionaire and head of Reliance Ltd, the largest of all Indian conglomerates.

Indian Prime Minister Narendra Modi and media mogul Mukesh Ambani (photo: Getty Images/AFP/S. Panthaky)
Mutual appreciation society: Modi's Digital India programme is naturally tied to Mukesh Ambani's success in his telecom and IT infrastructure investments. Similarly, the government's infrastructure modernisation of airports, power, ports and gas distribution across India is being largely powered by the Adanis

Just a few days after the new prime minister took office for the first time in 2014, Ambani concluded the biggest deal in the history of India's media sector: he bought Network 18, which includes television channels, magazines and websites, for about US$700 million. The media in this network openly and actively backed Modi and the BJP in the 2019 election.

Quid pro quo arrangements with big business

But it is not just the media sector that is backing Modi. It is worth noting that several central Indian states have large reserves of coal, bauxite, tin and above all high-quality iron ore. Only a tiny amount of these reserves are being mined – among other reasons because the indigenous population of India, which lives in the forests in the areas where these reserves are to be found, are resisting being displaced from the land.

The government has declared almost every form of resistance to be "Maoist", thereby justifying deadly "anti-terrorism" interventions by the military and the police. A London-based consultancy has estimated that 80 billion will need to be invested, if the military operations are successful.

In addition to Mukesh Ambani, another of Modi's major backers is the industrialist Gautam Adani of the Adani Group. While Modi was still chief minister in Gujarat, Adani was, with Modi's help, able to push ahead with a number of major projects in the state, such as the creation of a special economic zone with a container port stretching over 60 square kilometres. It is the biggest port in India.

Moreover, the biggest coal-fired power station on the Indian subcontinent is situated in the special economic zone. To make space for it, swathes of mangrove forests were chopped down. Neighbouring fishing villages have complained about water pollution and fly ash. As a result, the previous Indian government in Delhi had imposed fines to the tune of €25 million on Adani; a court even banned other companies from setting up shop in the special economic zone.

In July 2014, just shortly after the Modi government came to power, it granted Adani his long-desired environmental certificate of compliance without conducting any checks and cancelled the fine.

ʺAn attack on the constitution and democracyʺ

Narendra Modi and his BJP have never made any bones about their Hindu nationalist agenda, and since their re-election in May 2019, they have sought to anchor this agenda in law. In December, a new act governing citizenship by naturalisation was passed.

It allows migrants from neighbouring countries Pakistan, Bangladesh and Afghanistan Indian to apply for Indian citizenship, explicitly mentioning those who belong to religious minorities such as Christians, Hindus, Sikhs, Buddhists, Jains and Parsis. The law does not, however, apply to migrant Muslims. For weeks, members of the Muslim minority and others have been demonstrating against this discriminating act. Critics see it as an "attack on the Indian constitution and democracy".

On 8 January, several million Indians took part in a general strike to protest against not only this new act, but also the government's plans to sell off state-owned Indian companies and the watering down of workers' rights – two things that have long been on the wish list of big business.

Dominik Muller

© 2020

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