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Wikileaks: “Bhopal Gas Tragedy NGOs reveal Wikileaks’ cables on Dow Chemicals; Allege Indian Govt. kowtowed to US pressure”

Original link: http://www.wikileaks-forum.com/bhopal/626/bhopal-gas-tragedy-ngos-reveal-wikileaks-cables-on-dow-chemicals/18740/

Bhopal Gas Tragedy NGOs reveal Wikileaks’ cables on Dow Chemicals; Allege Indian Govt. kowtowed to US pressure

Submitted by admin4 on 17 April 2013 – 11:01pm

By Pervez Bari, TwoCircles.net

Bhopal: Representatives of five NGOs (non-government organisations) working for the welfare of the survivors of 1984 Bhopal gas tragedy, the world’s worst industrial catastrophe, have accused the Government of India of kowtowing to US Government pressure to serve the interests of Union Carbide and Dow Chemical in Bhopal.

Addressing a press conference here on Wednesday the representatives of the NGOs while citing recently released documents from Wikileaks’ “Kissinger Cables” said former Commerce Minister Kamal Nath and Planning Commission Deputy Chairman Montek Singh Ahluwalia welcomed Dow investments in India and contradicted the Government of India’s stated position on Dow’s liabilities in India.

Representatives of five NGOs working for the welfare of the survivors of 1984 Bhopal gas tragedy addressing Press Conference.

A cable sent by Deputy Chief of Mission in New Delhi Steven J White on July 27, 2007 says: “During the CEO forum event in October 2006, GOI officials including Commerce Minister Kamal Nath and Planning Commission Deputy Chairman Montek Singh Ahluwalia stated that they welcomed further Dow investment in India and did not believe that Dow was responsible for the disaster site clean-up.”

The US Ambassador David Mulford is reported to be urging the Government of India to “drop its claims against Dow” in a cable sent on September 18, 2007. In reply Ahluwalia assures the Ambassador that the Government of India does not hold Dow responsible for the clean-up but is unable to withdraw its claims against Dow because of “active and vocal” NGOs. According to the cable Ahluwalia then advised the Ambassador to discuss the issue of Dow Chemical’s Bhopal liabilities with Finance Minister Chidambaram.

The Bhopal organisations said the available cables indicate that the Government of India has consistently short-changed Indians and Bhopalis and served the interests of Union Carbide Corporation. As early as in the 1970s, the Government of India compromised on principles related to foreign exchange to help Union Carbide retain majority control over Union Carbide India Limited (UCIL).

The organizations stated that a cable sent by Deputy Chief of Mission David T. Schneider from the US Embassy in New Delhi on February 4, 1975 shows that the Government of India allowed Union Carbide, USA to bypass the Foreign Exchange Regulation Act and obtain loans from American Exim Bank instead of an Indian financing agency. Another cable of September 11, 1975 from US Secretary of State Henry Kissinger to the US Embassy in India shows the support the US government gave to Union Carbide, USA in securing loans from the US Exim Bank for its Bhopal operations.

The organizations presented copy of a cable sent by the then US Ambassador in India William Saxbe on April 20, 1976 that expresses satisfaction at the dilution of FERA guidelines so that Union Carbide can continue to hold majority stakes in its Indian subsidiary.

The representatives of five organizations – Bhopal Gas Peedit Mahila Stationery Karmchari Sangh, Bhopal Gas Peedit Mahila Purush Sangharsh Morcha, Bhopal Gas Peedit Nirashrit Pensionbhogi Sangharsh Morcha, Children against Dow/Carbide and Bhopal Group for Information & Action stated that the Wikileaks documents highlight the historical roots of the continuing injustice in the case of the world’s worst industrial disaster in Bhopal. They said that the injustice in Bhopal is being perpetuated by the support of the US and Indian government to Union Carbide and Dow Chemical as well as that by traitors such as Kamal Nath, Chidambaram and Ahluwalia.

It may be recalled here that on the intervening night of December 2-3, 1984 Union Carbide pesticide manufacturing factory had spewed poisonous Methyl Iso-cyanate gas whereby 3000 people had perished virtually instantly and over the years more than 25000 have kissed death and the sad saga is still continuing uninterruptedly. About half a million are suffering from the side effects of the poisonous gas and several thousand people have been maimed for life.

A cartoon on display of Uncle Sam controlling Indian high profile leaders and officials at the venue of Press Conference.

Meanwhile, the details of the extracts from Wikileaks are as follows:-


Date: February 4 1975
Sub: Union Carbide Application for Exim Loans
From: US Embassy, New Delhi, India
To: Department of State, United States of America
URL: https://www.wikileaks.org/plusd/cables/1975NEWDE01606_b.html

Date: SEPTEMBER 25 1975
Sub: Indo-US Relations: Atmospherics: Positive Vibrations
From: US Embassy, New Delhi, India
To: Department of State, United States of America
URL: https://www.wikileaks.org/plusd/cables/1975NEWDE12918_b.html
Extract: We are trying to take advantage of the opening provided by Kaul’s interest in solving economic problems by asking for finance action to resolve a large variety of problems such as the fertilizer arbitration case, remittance delays, Pan Am and TWA problems and pending investment proposals such as Union Carbide and national starch as well as an easing of the more onerous FERA guidelines. (as this cable was being prepared union carbide telephoned to say that its proposal had been suddenly approved after 6 months of waiting.) we hope to get more results. The “success stories” so far relate to GOI movement on the north Vietnam problem, a noticeable easing of “fly Indian” restrictions on Indians travelling on USG programs and union carbide.

Date: JANUARY 5, 1976
Sub: Press Release on EXIMBANK Credit to India
From: Department of State, United States of America India
To: US Embassy, New Delhi
URL: https://www.wikileaks.org/plusd/cables/1976STATE001679_b.html
Extract: The Export-Import Bank of the United States has authorized a direct credit of dol1,260,000 to Union Carbide India Limited (UCIL), to support a dol2.8 million sale of US equipment and services required for the construction of a plant to produce insecticides and other agricultural chemicals. The plant will be built at Bhopal, Madhya Pradesh, for the production of methyl-isocyanate based pesticides. us purchases will include reactors, distillation towers, heat unclassified un-classified page 02 state 001679 exchangers, centrifuges, filters, dryers, valves, control instrumentation, safety equipment. us suppliers will include Vulcan manufacturing company of Cincinnati, Ohio, and Gould pumps inc., of Seneca fall, New York, among others.

Date: APRIL 20 1976
Sub: Foreign Exchange Regulation Act (FERA) Guidelines amended
From: US Embassy, New Delhi, India
To: Department of State, United States of America
URL: https://www.wikileaks.org/plusd/cables/1976NEWDE05722_b.html
Extract: the earlier guidelines had created problems for the goi in dealing with the cases of multi-product companies such as union carbide, phillips of the netherlands, imperial chemical industries and other whose contribution to indian industrial development and exports was vital but who could not match the strict criteria under the old guidelines and, at the same time, were unwilling to come down to a 40 percent foreign equity position. foreign capital is now assured of a reasonable chance to retain majority holding and management control for investment in india under conditions which, most foreign businessmen feel, are not unduly restrictive

Date: JULY 27, 2007
Sub: New Delhi Weekly ECON Office Highlights
From: US Embassy, New Delhi, India
To: Department of Agriculture, Department of Energy, Department of State, Department of Transportation, Department of the Treasury, Federal Aviation Administration, India Chennai, India Kolkata, India Mumbai
URL: https://www.wikileaks.org/plusd/cables/07NEWDELHI3429_a.html
Extract: During the CEO Forum event in October 2006, GOI officials including Commerce Minister Nath and Planning Commission Deputy Chairman Montek Singh Ahluwalia stated that they welcomed further Dow investment in India and did not believe that Dow was responsible for the disaster site clean-up.

Date: SEPTEMBER 18, 2007:
Sub: Ambassador Discusses CEO Forum Issues with Planning Commission Deputy Chairman Ahluwalia
From: US Embassy, New Delhi, India
To: Department of Commerce | Department of Energy | Department of State | Department of the Treasury | India Chennai | India Kolkata | India Mumbai
URL: https://www.wikileaks.org/plusd/cables/07NEWDELHI4272_a.html
Extract: The Ambassador also cited the GOI’s continued third party claims against Dow Chemical in the ongoing Bhopal land reclamation lawsuit as a further impediment by Dow and others to invest in India, and he asked that the GOI drop its claims against Dow. Ahluwalia took the Ambassador’s points on McDermott, noting the importance of finally putting the issue to rest. On Dow, he said that the GOI does not understand Dow’s concern about future civil or criminal liability since the GOI third-party claims do not suggest a GOI presumption that Dow is responsible for the cleanup.
The GOI’s problem is that the NGOs are very active and vocal in this case, and it is very difficult for the Government to now drop its claims against Dow. The GOI was hoping for a quick resolution of the case which would have settled the issue, but Dow prevented this by asking for a stay in the proceedings. Ahluwalia noted that the issue of whether a company like Dow can be held liable for the actions of another company solely on the basis of acquiring that company after the culpable activity occurred is an important and novel legal issue in India that needs to be resolved. Ahluwalia recommended that the Ambassador discuss the issue with Finance Minister Chidambaram – a noted jurist. (pervezbari@eth.net)


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Gas Victims given substandard drugs from last 27 years

Corruption Kills: Bhopal Gas Victims Demand Strong Jan Lokpal Bill

Press Statement 8-August-2011

At a press conference today, five organizations working with survivors of the 1984 Union Carbide disaster announced their action plans as part of the “India Against Corruption” campaign.  They will be holding a demonstration at the Union Carbide factory tomorrow at noon to condemn the anti corruption bill proposed by the central government. Survivors from Bhopal will be joining the actions led by Anna Hazare and solidarity actions in Bhopal from August 16.


Survivors of the Bhopal disaster said that a strong Jan Lokpal Bill is required to deal with corruption at all levels in the central and state governments and the judiciary. They said that corruption has been, and continues to be a significant reason in the denial of proper medical care, rehabilitation and fair compensation.


Rashida Bee, president of Bhopal Gas Peedit Mahila Stationery Karmchari Sangh said   “For the last 27 years we, Bhopalis, have been victims of corruption by Prime Ministers, Chief Ministers, Ministers in the state and central governments, Judges in the Supreme Courts and Claim tribunals, bureaucrats of all ranks and other employees, government scientists and doctors, and its time to start putting an end to it in right earnest.”

Balkrishna Namdeo, president of Bhopal Gas Peedit Nirashrit Pension Bhogi Sangharsh Morcha said that in the last 27 years, crores of rupees from the public exchequer have been misappropriated every year in the medical care and rehabilitation of the Bhopal gas victims. He pointed out that a former Minister of Gas relief in the state government who had had to resign in the face of corruption charges earlier, has now been rehabilitated in the state cabinet with three portfolios.


Rachna Dhingra of Bhopal Group for Information and Action said that in the government system of medical care, corruption in the purchase of medicines for gas victims is most illustrative of the failure of the existing systems to deal with corruption.


She said in December 2006 survivors organizations had carried out a citizens’ raid on two drug stores of the gas relief department. Based on the information collected during the raid, in January 2007  a submission was made to the Supreme Court pointing out that more than half of the medicines meant for gas victims were purchased from companies known to produce sub-standard medicines.



In March 2007, six survivors and supporters went on a 19 day fast and dharna, demanding supply of quality medicines and other improvements in medical care and rehabilitation.  While the survivors on fast are still facing charges for attempted suicide, nothing has been done to improve the quality of the medicines.


In September 2007 the organizations complained about the quality of drugs in gas relief hospitals to the Monitoring Committee set up by the Supreme Court. On 27 May 2008, the Monitoring Committee submitted its 7th report pointing out that none of its recommendations, including those about improving quality of medicines,  had been followed by the state government. In its 7th report, the Monitoring Committee asked the Supreme Court to bestow certain powers so that it could ensure that the state government followed its recommendations.


In January 2011 the Supreme Court asked the Monitoring Committee to list out the powers that it would like to have to effect improvement in the medical care of the Bhopal victims.



According to the survivors’ organizations, in March 2011the Monitoring Committee did draw up a list of powers that it would like to have, but due to the machinations of the corrupt bureaucrats and others in the state government, the list remains to be presented before the Supreme Court. Survivors’ organizations charged the Ministry of Bhopal Gas Tragedy with sabotaging the work of the Monitoring Committee so that it could continue with its corrupt ways.


Survivors’ organizations said that their recent investigation in to quality of drug supply shows that several Indore based manufactures known to be suppliers of substandard medicines such as Quest Laboratories, Deepin Pharmaceuticals and Zenith Drugs have continued to sell their drugs regularly to the Bhopal Gas Tragedy Relief and Rehabilitation Department from 2007 till today.  (Details of companies) They said that this was in clear violation of the Monitoring Committee’s recommendations in its 3rd, 4th and 6th reports to the Supreme Court.




Rashida Bi,Bhopal Gas Peedit Mahila Stationery Karmchari Sangh

94256 88215

Nawab Khan,Bhopal Gas Peedit Mahila Purush Sangharsh Morcha


Balkrishna Namdeo,Bhopal Gas Peedit Nirashrit Pension Bhogi Sangharsh Morcha


Satinath Sarangi, Rachna Dhingra,Bhopal Group for Information and Action


Safreen KhanChildren Against Dow Carbide


Please visit www.bhopal.net for recent information on the International Campaign for Justice in Bhopal


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Government aims to quell public anger rather than help Bhopalis

BHOPAL.NET OPINION. On the face of it, the Group of Ministers’ recommendations seem attractive. 700 crores in “enhanced compensation”, site to be cleaned, Anderson pursued – it sounds good, until you examine the details. Then it becomes clear that these proposals, while seeking to salve the public’s sorely wounded pride, actually do little or nothing for the Bhopalis. Survivors are calling it “another betrayal”.

Confidential Minutes from the Meeting of the Group of Ministers on Bhopal


Lachho Bai
Nothing for Laccho Bai, constantly ill since inhaling Union Carbide’s gases, who has lost her reason and her sight.

There are 572,000 officially registered victims of Union Carbide’s gases.
The 700 crore rupees of compensation will be shared among 45,166 people who have lost relatives or suffered certains sorts of injury. (1) More than 525,000 victims are excluded. [pullquote]93% of Union Carbide’s officially registered victims will get nothing but a notional Rs 2/- per head from the insulting June 7 judgement. [/pullquote] Of these many are seriously ill with conditions not covered by the government’s method of claims assessment. See here.

Recipients of the government’s apparent largesse will be chosen on the basis of the flawed system of claims analysis that proved to be inaccurate, unjust, slapdash, bedevilled by bureaucracy, slow, open to abuse, and often corrupt. See this 1991 report by the Bhopal Group for Information and Action. Also On the Question of Whether a Fresh Survey of Bhopal Victims is Required. And Survey of Compensation among residents of Jaiprakash Nagar. Oct 2002.


Warren Anderson is 91 years old. It is a foregone conclusion that the US administration will refuse an extradition request, so there is no risk in making this promise.

The government could and should be pursuing Union Carbide Corporation and Union Carbide Eastern, accused alongside Warren Anderson, and like him absconding from justice since 1992. But there is no mention of them. The reason is undoubtedly to protect Dow Chemical. [pullquote] UCC still exists as a legal entity wholly owned by Dow, which is not only allowed to do business openly in India but, as recent media reports have shown, to direct government policy making.[/pullquote]

While the extent of Anderson’s direct involvement has been questioned by the US administration, there can be no doubt about the roles of UCC and UCE in directly causing the gas catastrophe.

The ICJB does not oppose attempting to extradite Anderson, but it demands that UCC and UCE should also be pursued on the charge of “culpable homicide”. If found guilty, they would at least be compelled to pay more than two rupees per victim.


Dow claims it had nothing to do with UCIL. But UCIL was majority-owned by Union Carbide Corporation which thus shares the major part of the responsibility for the contamination and failure to clean up. When Dow acquired Union Carbide’s assets, it also acquired its “polluter pays” liabilities.

[pullquote right]If UCC is liable, Dow is liable. This is the opinion of India’s Ministry of Law. But Dow is strongly protected by its lawyer Abhishek Manu Singhvi, who also happens to be Congress Spokesman and part of the Manmohan Singh inner circle. He sees no conflict of interest. Do you?[/pullquote]

Dow has admitted routinely bribing Indian officials to get a banned pesticide certified as safe, yet no action is taken against it. Dow used bribery to gain certification for its pesticide Dursban which is so dangerous to children that it is banned for home use in the US. In India it is sold as safe. The government has not taken any steps either to punish the company for bribing officials, or to take Dursban off the home market.

In the 1990s Dow paid more than $10 million to the family of an infant, Joshua Herb, who had been damaged by Dursban. What will damaged Indian children get?


No words are needed to disprove the claim that water contamination is confined to the factory site. This poisoned goat, floating in a ‘solar evaporation pond’ near the Garib Nagar basti half a kilometer outside the factory, says it all.

NEEERI’s statement is at odds with numerous reports from Greenpeace and other organisations, including two published last December. [pullquote]While relying on discredited, incompetent NEERI the UPA-II government is ignoring an offer from the EU Parliament to fund a thorough and impartial study of the nature and extent of contamination to the highest scientific standards.[/pullquote]NEERI (National Environmental Engineering Research Institute, Nagpur) is a discredited organisation whose slipshod methods and careless conclusions during a 1990s survey of the contamination were severely criticised by US consultancy Arthur D Little which had ironically been retained by Union Carbide Corporation in Danbury to advise Union Carbide India Limited.

For details please see The farce that was and is NEERI.

Carbide executives privately ridiculed NEERI’s work while recognising that it was the pet of the MPPCB (Madhya Pradesh Pollution Control Board) which was opposed to the involvement of ADL. [pullquote right]The rate of birth defects in places where the water is contaminated is running at 10 times that of the rest of India.[/pullquote]No surprise then, when in 2001 MPPCB chairman V K Jain was exposed as having amassed money and jewellery worth 15 crores of rupees by corrupt methods. The entire MPPCB board was dissolved.

The human impact of the poisoned water can be seen just by walking through the affected areas. NEERI: Briefing notes for journalists.


The proposal to bury the waste on the site itself under NEERI’s direction is the final folly. It will not be done to a proper standard and the groundwater pollution will be exacerbated instead of contained. [pullquote]Says US attorney Raj Sharma, “NEERI was responsible for the creation of the leaking landfill in the solar evaporation ponds. They rubber stamped everything that UCC proposed. This plan will be a disaster in its own right if effectuated.[/pullquote]


The Group of Ministers is thus reneging on a promise its immediate predecessor made to the survivors two years ago. The GoM minutes reveal no mention of a reliable mechanism to deliver social, economic, medical rehabilitation for gas survivors and their children. Nor does it make any proposals for the relief of those whose lives have been blighted by the poisoned water. The families of the children born damaged will get no compensation, no help of any kind.

While ignoring the promise made earlier to the survivors the confidential minutes of the GoM meeting reveal that it proposes to hand a huge wad of cash, some 700 crores of rupees to the MP state government. Cynics will note that years after hundreds of crores were poured by the Centre into State coffers for the creation of jobs for gas survivors, not a single job has been created, not a single person has been employed.

No doubt tailors in Bhopal and elsewhere are busily deepening and strengthening pockets.

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Join the Rally for Justice in Bhopal, June 24, Delhi

Don’t let the Government betray Bhopal once again.

If you were desperate to do something for Bhopal, and didn’t know what to do, here’s something you can do.

Join the Rally. Bring your friends and family. Bring your own placard.

WHERE: Mandi House to Jantar Mantar, New Delhi.
WHEN: 24 JUNE, 2010. 11 a.m.
WHY: To Condemn the Latest Betrayal of Bhopal

The official copy of the report of the Group of Ministers on Bhopal has not been released to the media. But the media has been selectively and confusingly reported on certain parts of the recommendations reportedly given to them by inside sources. These reports make it seem as if:
a) The GoM is recommending enhanced compensation for Bhopal victims to the tune of Rs. 1500 crores
b) The GoM is recommending that the Centre will pay for clean-up and recover the money from Dow Chemical.
c) The GoM will recommend the Government to address the issue of liability by pursuing Anderson.
d) The GoM will recommend that Rs. 720 crores be handed over to the State Government to take care of rehabilitation.

A senior bureaucrat who was present at the GoM meeting revealed some startling details:
a) Only 41,000 people, out of 5,72,000 people exposed and injured by the gas leak will receive any compensation. 5,31,000 people, who received paltry sums of Rs. 25,000 from the earlier settlement for life-long ill-health, will receive nothing.
b) The GoM has reportedly committed Rs. 300 crores. This is wholly inadequate for cleanup of more than 10,000 tons of toxic wastes, a contaminated groundwater aquifer. Also, no provision has been made for the medical care and compensation of the 25,000 or more people who have been forced to consume this poisonous groundwater and have developed serious and lifelong illnesses as a result. As for recovery of money from Dow, the Government has indicated it will merely await a verdict from the Court and will do nothing to actively pursue Dow Chemical.
c) While much noise is made about extraditing Anderson, not a word has been mentioned about enforcing the appearance of the other foreign accused — i.e. Union Carbide Corporation USA, and Union Carbide Eastern Hongkong.
d) The Rs. 720 crores given to the State Government will suffer the same fate as the Rs. 530 crores already spent by the MP Government for rehabilitation of Bhopal victims. Till date, not one person has been gainfully employed as a result of MP Government’s economic rehabilitation schemes. Victims are paying through their nose for medical treatment at private clinics because of the horrendous state of the hospitals set up using a big chunk of the Rs. 530 crores. A Supreme Court Monitoring Committee that looked into medical rehabilitation has severely criticised the medical infrastructure and said that the need of the hour is more doctors, better administration and better quality medicines. Instead of investing in these, the Government of Madhya Pradesh has submitted a proposal in which a bulk of the funds will be used for construction of new wings. Several dozen lakhs of rupees will be used to purchase fictitious equipments like “automatic micro-organism [sic] detection instruments” and non-equipment items such as “identification & sensitivity of micro organism [sic]”.

Organised by:
Children Against Dow Carbide
Bhopal Gas Peedit Nirashrit Pension Bhogi Sangarsh Morcha
Bhopal Gas Peedit Mahila Udyog Sanghatan
Bhopal Gas Peedit Mahila Purush Sangarsh Morcha
Bhopal Gas Peedit Mahila Stationery Karmachari Sangh
Bhopal Gas Peedit Sangarsh Sahyog Samiti
Bhopal Group for Information and Action

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“US-India Strategic Economic Partnership”: Kowtowing to US big business


The Report of the US India CEO Forum titled “US-India Strategic Economic Partnership”, which was released during the recent Bush visit, has not attracted much media attention in contrast to the hype over the nuclear deal. The CEO Forum was formed during the Visit of the Prime Minister Manmohan Singh to the US in July 2005 with “a mandate to develop a road map for increased partnership and cooperation between the two countries at a business level”. The roadmap unveiled in the Report, however, goes much beyond partnership and cooperation between the Indian and the American corporates. It seeks to rework entire policy frameworks governing almost all the major sectors of the Indian economy.

The fact that a majority of the recommendations of the CEO Forum are related to changes sought in Indian laws and regulations and only a few are meant for the US Government shows the unequal structure underlying the economic partnership. The Indian corporates led by Ratan Tata (co-chair of the CEO Forum) have happily accepted this junior partnership to US big business as the most convenient means of their class development in the current global setting. The joint declaration issued by the Prime Minister along with the US President welcomed the CEO Forum Report, agreeing to consider its recommendations and directed the Chairs of the Indo-US Economic Dialogue to “follow up expeditiously with the CEO Forum”. The Deputy Chairman of the Planning Commission (who co-chairs the Indo-US Dialogue) lost no time in announcing the formation of twenty-six committees to carry forward each of the recommendations meant for India. This zealous haste implies that the Government wants to implement at least some of the recommendations before the US visit of the Prime Minister later this year.

Being faithful adherents of neoliberalism, the Prime Minister and the Deputy Chairman of the Planning Commission seem to believe that what is good for American and Indian big business is also good for the people of India and the Indian economy. A closer look at the recommendations of the Report not only exposes the fallacies of neoliberal thought but also points towards several imminent measures which would take the UPA Government further away from the vision underlying the National Common Minimum Programme.

Recommendations of the CEO Forum

The recommendations of the Report are summarised under the last section of the Report titled “Enabling Environment”. The creation of an enabling environment is premised upon the usual prescription for greater liberalization: “tariff and non-tariff barriers to be reduced in respect of all products, agricultural and manufactured, over a specified period of time by the US and India”. Underlying this formulation is the completely misplaced notion harboured by Indian corporates that there is a convergence of interests between India and the US as far trade liberalization is concerned. The role played by India during the Hongkong Ministerial Conference of the WTO betrayed a similar understanding currently prevailing within the Indian policy establishment that India would benefit immensely from liberalization of services and therefore it is justifiable to concede ground to the developed countries in return, in terms of tariff reduction in industry and agriculture. This shows that the Indian corporates are willing to trade off the interests of the overwhelming majority of our people in their narrow self-interest.

A closer scrutiny of the 30 recommendations made by the CEO Forum reveal that only 4 recommendations are directly related to some concrete benefit accruing to India and its corporate sector. These are as follows:

1. Transfer of high technology to India to be relaxed by the US government in extension of COMSAT rules to India and ISRO.

2. US government to allow/accelerate the transfer of dual use items/technologies.

3. US to pursue transfer of civilian-nuclear energy technology to India to enable India to meet its energy needs and achieve energy security.

4. Liberalize the US visa regime required for service providers in IT (H1B/L1), nurses (EB3), i.e. wherever U.S. is facing shortages of trained personnel. Also, ease quantitative restrictions/yearly quotas of such visas. Other impediments such as attestation requirements, reduction of periods of stay and prescriptive wage levels may be dispensed with.

These comprise most of what the Indian corporates seek to achieve through the strategic economic partnership with US big business. If this ultimately translates into actual policy changes in the US, which seems unlikely anyway, benefits would be restricted to some transfer of technology in space research and nuclear energy and a few thousand more US visas for skilled personnel in sectors like IT, Healthcare etc.

In addition there are a few recommendations, which are meant either for the US or to be jointly acted upon by the US and the Indian Government. These are:

1. US to consider instituting a new business facilitator proposal to support US companies.

2. Both countries need to make tourist visas easier to obtain.

3. India-US Dual Taxation Treaty to be revised to include state taxes and federal social security/Medicare deductions.

4. Indian IT firms should be permitted to bid for US technology programs after receiving appropriate clearances.

The Indian & US economies to be opened up further for freer trade in services and products. Dialogue to be initiated on a US–India FTA to take bilateral trade and investment to a new level.

These may provide some benefits to the Indian corporates, especially the IT and Tourism sector. The effort is clearly to lure India into greater trade liberalization by making some concessions to some of the successful Indian exporters in the Services sector.

The rest of the 21 recommendations are all exclusively for India. Most of them are in the form of demand(s) for policy changes related to specific sectors of the Indian economy to the obvious benefits of the US corporates. They are as follows:

Infrastructure: i. Need to foster speed, efficiency and transparency in the bidding process for BOT contracts in infrastructure in India.

Power: i. Need for Indian power sector reforms to ensure sanctity of contracts, encourage competition, promote market-driven tariffs and separate regulatory and adjudication authorities.

Insurance: i. Insurance Industry FDI cap to be reviewed and raised by India.

Banking: i. Consider allowing FDI in Indian private sector banks; schedule for liberalization to be advanced from 2009. ii. Restrictions on expansion/new branches by Indian banks in the US to be removed/norms liberalized.

Retail Trade: i. Further liberalization of FDI in retail in India to be considered.

Oil & Gas: i. The proposed Petroleum and Gas Regulatory Board Bill to be enacted in India. ii. The Indian Natural Gas Pipeline Policy to be adopted.

Real Estate & Urban Development: i. India to consider reducing restrictions on FDI in the Real Estate Sector. Also move ahead on urban land reforms, streamline the regulatory, tax and duty structure, revamp stamp duty and title registration regimes and reconsider change of use restrictions as was done in the US for decaying cities.

Telecom: i. India to pursue truly technology-neutral policies in telecom, and ensure a level playing field so as to allow the full range of private telecom companies and public sector (Government owned) companies to compete fairly and fully.

IT: i. Licensing requirements for certain information sector products and for services, which support business activity, should be reviewed and eliminated by the government of India.

Media: i. Elimination of FDI caps in sectors such as print media, broadcasting, cable and satellite systems and e-commerce to be considered by government of India.

Defense Procurement: i. The Offset Policy of India needs to be framed considering global best practices and the use of “indirect” offsets.

The other recommendations of the CEO Forum seek changes in the Indian judicial system, and the Intellectual Property regime along with changes in tax and company laws.

Judicial Reform & Regulatory Framework: i. Strengthen the Indian judicial system to address case backlog, expedite legal proceedings, address the issue of no limit on the number of adjournments, inadequate number of judges, large number of court holidays and civil infrastructure. ii. Strengthen the regulatory environment in India, to be clear and consistent with legal enforcement through special courts at both Central and State levels. iii. Need to resolve commercial and contractual disputes quickly through an independent tribunal under the Arbitration and Conciliation Act, 1996.

Intellectual Property Regime: i. Specialized IPR courts to be established to enforce IPR laws. ii. India needs to develop a TRIPS compliant IP system and IP protection, especially for software and published materials, print or electronic.

Company Law: i. Review the Indian Companies Act, with respect to provisions relating to private companies, as many US companies are privately held.

Taxation: i. India to consider treating dividends received from overseas companies in the hands of an Indian resident at par for tax as domestic dividends, so as to make outward FDI no less attractive.

Visa Regime: India to consider providing visas for up to five years and removal of FRO/FRRO requirements for US citizens to report physically once a year.

One of the reasons that have prompted the Indian corporates to endorse such a skewed ‘partnership’ heavily loaded in favour of the US corporates is the perceived need to attract more FDI from the US. Ratan Tata, who co-chairs the CEO Forum, also chairs the Investment Commission set up by the Prime Minister. This Commission has recently submitted a Report, which has underlined the need to attract FDI over $ 70 billion in order to sustain a GDP growth rate of 8% over the next five years. Given the fact that India has attracted FDI worth around $ 38 billion between August 1991 to January 2006 (of which FDI from US is less than $ 5 billion), the target set by the Investment Commission seems totally over-ambitious.

India has not been able to attract larger volumes of FDI, especially in comparison with countries like China, South Korea or Malaysia, despite having a much more liberal FDI regime. India has foreign ownership restrictions in very few sectors and 100% FDI is permitted in most sectors through the automatic route. China, which has a far more restrictive regime where FDI proposals are approved on a case-by-case basis and foreign ownership is restricted in many sectors, has been able to attract more than ten times the volume of FDI that India attracts annually. Rather than reviewing this experience properly, Indian corporates are prodding the policymakers to move towards lifting whatever little regulation that exist in India vis-à-vis foreign capital. The effort is to increase the share of FDI not through greenfield investments like in China but by facilitating the takeover of Indian companies by US based MNCs through mergers and acquisitions, a policy that was followed by Brazil in the late 1990s to its own detriment. Besides failing in its objective to meet the over-ambitious FDI target, the adoption of such a policy course would neutralize the benefits of FDI accruing to the Indian economy in terms of technological advancement and generation of skilled employment.

“Strategic Economic Partnership”: Implications for India

The Forum has identified 6 major areas for cooperation. These include Physical Infrastructure Development, Energy Security, Human Resource Development, Technology Exchange, Trade and Industry Promotion and Intellectual Property Protection. Cooperation in Physical Infrastructure Development involves setting up of a $ 5 billion private sector Infrastructure Fund (minority Government participation) with the participation of US companies to fund infrastructure projects under the supervision of multilateral agencies like the World Bank, ADB and IFC. There are further proposals to involve the US in the development of Mumbai into a ‘Regional Financial Centre’ and the setting up of large scale Special Economic Zones. The Forum has called for a change in the bidding process for infrastructure projects to foster ‘speed, efficiency and transparency’. What this implies is that the development of infrastructure in India, especially key infrastructure projects like roads, sea and airports and Special Economic Zones etc will be undertaken by the private sector with US corporate lending through the Infrastructure Fund.

Besides the fallacy in assuming that the Government of India lacks adequate resources to develop such infrastructure through public investments, which underlies the logic of such ‘Private-Public Partnerships’ (PPP), the problem with such a model of infrastructure development lie in the conditionalities that come along with private funding in terms of high cost borrowing which are passed on as high user charges (higher toll taxes for roads for example). Moreover, the fact that ‘flexible, internationally competitive labour laws’ have been demanded for the Special Economic Zones to be set up under PPP also point to such objectionable conditionalities. In the area of Energy Cooperation also the conditionalities have been clearly specified. The precondition set for further infusion of US capital into the Power and Oil sector is the promotion of a ‘market driven’ structure of power tariffs and pricing of petro products. A US-India private sector Task Force comprising power companies has been proposed to work with the Central and select State Governments to “facilitate on-time implementation of investments being made and resolution of legacy disputes in the Indian power sector”. An early passage of the Petroleum and Natural Gas Regulatory Board Bill has been advocated. It is clear that further neoliberal reforms in the Power and Oil sector to benefit the US corporates have been accepted as a quid pro quo to cooperation in civilian nuclear energy and ‘clean fuel’ between the US and the Indian Governments.

Cooperation in Human Resource Development, besides involving US institutions of higher learning like MIT, Lincoln Labs, Bell Labs, John Hopkins and Carnegie Mellon to set up research institutions and Phd programmes in India has also proposed to upgrade the ITIs with the cooperation of the US companies. However, such cooperation also comes with the precondition of giving private educational institutions a “free hand in terms of fees, course structure and affiliations”. While the CEO forum has called for relaxation of US norms for transfer/export of high technology to India including dual use categories (like advanced electronics, semiconductor technology, aviation related technology, key software systems and equipment), removal of restrictions on R&D collaboration by the US companies and encouragement to R&D collaboration in product design and development as well as agricultural research, such transfer of technology and R&D collaboration is envisaged only under a drastically restructured Intellectual Property Protection regime in India. For instance, on cooperation in biotechnology the Report says, “Partner in Biotechnology by jointly developing a regulatory pathway to ensure regulations surrounding the sector are based on sound science, are transparent and supportive of policies that encourage investment in and commercialization of biotechnology, and promote trade in biotech goods and services. Both countries (i.e. US FDA working with the Indian FDA) should harmonize legislation to provide opportunities and protection for US as well as Indian companies in biotech related IPR.”

‘Harmonization’ of legislations related to Intellectual Property Protection between India and the US has serious implications for India. The CEO Forum Report says, “Intellectual Property Rights (IPR) protection has separated and divided US and Indian businesses in the past but there is an increasing convergence in the approach to IPR and supporting legislation. There is now a mutual, agreed agenda to frame laws, rules and processes to sustain the highest standards of protection to the inventor or the organization, which invests in IP. The next ten years can witness a new surge in partnership in IPR between the U.S. and India which includes mutual cooperation in IPR implementation and enforcement as well as building a ‘patents’ culture.” (Emphasis added). The key institutional changes which have been suggested by the CEO Forum in order to usher in a ‘patents culture’ in India includes setting up a national unit dedicated to IPR enforcement (HRD and I&B Ministries have been asked to take the first steps in coordinating the IPR enforcement efforts as a first step) and setting up of specialized Intellectual Property Courts to handle both civil as well as criminal cases related to IPR. A particularly significant recommendation calling for a “national initiative to crack down on piracy in the educational and research sectors” has been made in the Report. The report says, “The Ministry of Human Resource Development (and other relevant ministries, such as Health, for medical schools) could issue directives to all public and private educational and research institutions to stop using unauthorized photocopies of books and journals; take action against on-campus copy-shops engaged in illegal activity; and report periodically to the Ministry on what steps have been taken. This data would form the basis for more targeted efforts in the future.” Whether such an initiative is at all possible in India is another matter; but the fact that the Indian corporates could agree to such a proposal show how much they are out of sync with the Indian reality.

The seriousness with which the IPR regime and the policy framework is sought to be restructured by the CEO Forum is evident from the section on the pharmaceutical sector in the Report. A Report recently prepared by a Task Force under the Chairmanship of Dr. Pronab Sen of the Planning Commission has recommended that price controls be expanded to every medicine on India’s Essential Drug list. It has further recommended that patented medicines be subject to a price monitoring system with mandatory price negotiations and compulsory licensing if agreement on the price cannot be reached. Also, the task force has suggested that if a medicine reaches a certain volume it should be genericized. Besides calling for a review of the pharmaceutical price controls policy the CEO Forum Report has specifically challenged the Task Force recommendations. On the recommendation of genericization of an essential drug once its sale exceeds a specified volume the CEO Forum Report says, “Although the industry is confident that this particular recommendation will most likely not be adopted, it is troubling as it could portend future anti-industry actions by the government”.

The lopsided nature of the Indo-US business partnership is best manifested in the cooperation on Trade and Industry Promotion. The most important demand is for reducing restrictions on foreign investment. The demands to expedite the decision to allow FDI in the Retail sector in India as well as an accelerated timetable for raising the FDI caps in the Insurance and Banking sectors have been specifically articulated vis-à-vis the Government of India. These have been demanded along with a call for liberalizing the US visa regime for service providers, particularly for IT (H 1B/L 1) and nursing staff (EB3). This bargain between the Indian and the American corporates also underlies the ongoing collaboration between the Indian and the US Governments on the GATS negotiations in the WTO. For a few thousand more US visas for IT professionals and nurses in India, which would solely benefit the IT and private healthcare sectors, the Indian corporates are arguing on behalf of the US multinational retail giants like the Walmart and US based transnational banks and insurance companies for the further opening up of these sectors in India. The interests of the millions of Indians who are employed in the retail sector, especially in unorganized retail, or the security of the savings of millions of Indians in the banks and insurance companies, which have so far been protected by extant Indian regulations, are being sacrificed.

The role of the American and Indian corporates in the Defence sector has been increasing under the ongoing Indo-US Defence Cooperation. The CEO Forum report states that “with the opening of defense supplies from the US to India, there are new opportunities emerging for private sector defense cooperation”. In order to address the insecurity about the reliability of US Defence supplies, the CEO Forum has envisaged the integration of “Indian private sector companies into the global supply chain of US defense manufacturers, combined with co-production”. In return the adoption of a “liberal offset regime” in India has been demanded, which would imply a dilution of the current Indian policy which requires direct offsets for defence purchases over Rs 300 crores. Thus the lure of cooption of some Indian corporates as junior partners into the military-industrial complex of the US is being used to make India a major buyer of US defence supplies.

The setting up of a Dispute Settlement Mechanism in India, with the “power and jurisdiction to resolve commercial and contractual disputes quickly” has been proposed in the Report. The Report says that “An independent tribunal formed through the Arbitration and Conciliation Act 1996 should be a forum for dispute resolution. Specific focus on resolving legacy issues such as those impacting Dow/ Bhopal tragedy of 1984 and the Tamil Nadu IPPs would send a strong positive signal to US investors.” It is clear that a parallel judicial system favourable for the corporates and unaffordable for the bulk of Indians has been envisaged. Far from providing any justice to the victims of corporate negligence and crimes, like the Bhopal Gas tragedy, this is meant to refashion the judicial system to preempt any possibility of litigation against any company by common citizens in the Indian courts in future.


The Report of the CEO Forum on “US India Strategic Economic Partnership” has brought out clearly the class basis of the “strategic alliance” that the UPA Government seeks to cement with the US. This junior partnership to the US, especially American big business, while serving the interests of the Indian corporates who have forsaken all pretensions of autonomous development, would be severely detrimental to interests of the Indian people. Indian big business, which had suffered a jolt in the aftermath of the 2004 Lok Sabha elections when their darling, the NDA Government, was booted out unceremoniously, is seeking to push forward the discredited neoliberal policies in India in a direct alliance with American big business. It has to be ensured that the cheerleaders of neoliberalism within the UPA government are prevented from taking this anti-national agenda forward.


US-INDIA CEO Forum Members


JP Morgan Chase
Mr. William B. Harrison, Jr.
Chairman of the Board

Tata Sons Limited
Mr. Ratan Tata

US Members

AES Corporation
Mr. Paul Hanrahan
President & CEO

Cargill, Incorporated
Mr. Warren R. Staley
Chairman & CEO

Mr. Charles O. Prince
Chairman & CEO

Honeywell Inc.
Mr. David Cote
Chairman & CEO

The McGraw-Hill Companies
Mr. Harold McGraw
Chairman & CEO

Parsons Brinckerhoff Inc.
Mr. Thomas J. O’Neill
Chairman & CEO

Mr. Steven Reinemund
Chairman & CEO

Visa International
Mr. Christopher Rodrigues
President & CEO

Xerox Inc.
Ms. Anne Mulcahy
Chairman & CEO

Indian Members

Apollo Hospitals
Dr. Pratap C. Reddy

Bharat Forge Ltd.
Mr. Baba Kalyani
Chairman & MD

Biocon Ltd.
Ms Kiran Mazumdar Shaw
Chairman & MD

Mr. Deepak Parekh

ICICI One Source Ltd.
Mr. Ashok Ganguly

Infosys Technologies Ltd.
Mr. Nandan Nilekani

ITC Limited
Mr. Yogi Deveshwar

Max India Ltd.
Mr. Analjit Singh

Reliance Industries Ltd.
Mr. Mukesh Ambani
Chairman & MD

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