Prime Minister Narendra Modi may not be aware that one of India’s most strategic industries suffered a major financial loss last year. This loss was mainly down to certain wrong policies of the Commerce and Power Ministries in the last few years that allowed private sector power companies to freely import heavy duty turbines, boilers, transformers, and even turn-key projects mostly from China. All those items are made in India. The Indian public sector company boasts of best international quality standards and has a reasonably good export base. Actions of the two ministries, apparently under pressure from some private sector electricity generators, have shaken the very confidence of India’s most diversified as also the top-of-the-order power equipment manufacturer, built by the government as an important adjunct to the country’s energy security and national security. Now, Merrill Lynch has downgraded the company’s long-term rating for bank loan facilities.
If energy is vital to national security, the government can’t do something that weakens such public enterprises of importance as BHEL, Coal India, NTPC, Power Grid Corporation, ONGC, OVL, Oil India, IOC, HPCL and BPCL. But, it did exactly that which is, in a way, responsible for the poor performance of India’s No.1 power equipment manufacturer. The biggest beneficiary of the unqualified u-turn in the government policy is China. The latter not only exported a lot of power plant equipment to India’s private sector electricity companies but also sent scores of Chinese personnel to nut-bolt those projects, though not all of them came with approved job visa papers from India.
In China, such unwarranted immigrants would have been instantly caught and jailed. The Union Home Ministry did not even know how many Chinese personnel were legally working on those power projects in India, or if some of them were involved in security intelligence collection apparatus. Of late, some Chinese nationals in the garb of media were allegedly found collecting and transmitting information on security linked intelligence from India to China.
In fact, food, including water, energy, telecommunication, banking and insurance, civil aviation, surface transport, education and healthcare are as vital to the national security of the country’s three military services, defence production and border security outfits under the Home Ministry. This could explain why the Australian government took a policy decision last month to prevent a Chinese firm from taking over one of its biggest power distribution companies on “home security” grounds and why public opinion in the UK is fast growing against a large Chinese participation in the country’s biggest ongoing nuclear power project.
At least two giant Chinese telecom gear firms – ZTE and Huawei – are practically under strong surveillance in the US and EU for security reasons. Incidentally, both the Chinese firms are expanding in India in a big way and making massive investments. Right now, Huawei is said to be setting up its largest “global service centre” in Bengaluru at a cost of Rs. 1.36 billion.
China is ruling supreme in India’s telecom sector, the fastest growing telecom market in the world. For reasons best known to the government, the country is yet to manufacture basic chips, which gets imported mostly from China and South Korea, the two largest handset exporters to India.
Despite the fact that neighbouring China poses the biggest security threat to the country through its strategic presence across the Indian subcontinent, India, for reasons unknown, has chosen to be the biggest importer of their goods, services, and capital. Days after “The Australian” leaked the sensitive technical information on the French Scorpene stealth submarines, which is being built in India’s Mazagon Docks, China announced its attack submarine sale to Pakistan. Is India’s national security policy independent of its trade and economic policies with countries such as China?
China’s aggressive and well calculated economic, strategic, and military expansion programmes and its unitary political command system have made it a suspect across all established democracies, where free public debates and the checks-and-balance systems delay even the most important policy making process. The snail’s speed with which India’s vital indirect tax reform bill to introduce GST had progressed or the referendum in the UK on exit from EU, or the impeachment of former Brazil President Dilma Rousseff may be among the best recent examples of how the democratic system functions. Is China taking advantage of India’s democratic system to weaken the country, strategically and economically?
Paradoxically, the democratic republic of India and its powerful ministries and ministers and opposition leaders are against any one-size-fits-all security policy. Some of them are said to be even upset with the Union Cabinet's decision, last week, that allows foreign nationals, barring those from China and Pakistan, to settle in India under a “permanent residency status” if they invest only up to Rs. 25 crores within a period of 18 to 36 months. They are said to be against the exclusion of “well meaning” rich Chinese and Pakistanis.
India’s security policy needs to be well defined. Internal security concerns can’t be delinked with external security aspects. An easy market access to foreign countries that weakens India’s economy can’t be delinked with the country’s security policy. Governments all over the world use foreign trade and investments policy as part of their security policy. Even the so-called free market economy of the US bans export and import of products prejudiced to its national security. A national security policy that ignores a country’s economic imperatives is certain to fail. India must use its growing economic strength to shape a comprehensive security policy for itself.
If foreign powers are now paying more attention to India, it is because of the country’s economic progress and the growing strength of its key industries. IPA
(The views expressed are strictly personal.)