Mahatma Gandhi watch: India avoids adding insult to injury

Indian state bans controversial book about Gandhi, but government stops short of making insults to the leader a crime.

By Jason Overdorf
GlobalPost - April 1, 2011

NEW DELHI, India — A controversial new biography of Mohandas K. "Mahatma" Gandhi has kicked up a predictable furor in India, where assaults on free speech have become increasingly common in recent years.

It appears, however, that the government will stop short of making any insult to Gandhi punishable as a crime.

"It's a clear case of the undesirable deification that everyone does when it comes to someone like Gandhi, and also a lot of our other great men of the past," said Jai Arjun Singh, an Indian book reviewer. "[We have] this idea that he must be seen as a saint, not a human being who achieved extraordinary things."

Already this week, the Indian state of Gujarat banned the book, called "Great Soul: Mahatma Gandhi and his Struggle with India," following assertions by the local press that Joseph Lelyveld's biography claims Gandhi was a bisexual racist who left his wife for a German bodybuilder.

Soon after, central government politicians reportedly sought to make insulting the former pacifist leader and Indian symbol a crime. The harsh reaction was not surprising.

While India's muckraking newspapers and magazines ensure that freedom of the press remains one of the country's most cherished values, freedom of speech has been under assault.

A New Delhi court recently ordered police to file charges of sedition against novelist Arundhati Roy and Kashimiri separatist Syed Ali Shah Geelani for making anti-India speeches at a conference on the Kashmir conflict. And Lelyfeld now joins a growing list of eminent authors whose books have been officially banned.

In Maharashtra, the Shiv Sena, a far-right political party, last year forced Mumbai University to remove Rohinton Mistry's "Such a Long Journey" from its syllabus, and earlier compelled the state government to ban James Laine's "Shivaji — The Hindu King in Muslim India."

Similarly, Congress Party leader Sonia Gandhi spearheaded a fight to ban Javier Moro's racy biography on her life, which she called "fictionalized." And despite its literary community's immense love for Salman Rushdie, India's politicians were quick to ban "The Satanic Verses" in an apparent move to court the conservative Muslim vote.


"This is a country where hundreds of thousands pride themselves on having copies of [Adolf Hitler's] 'Mein Kampf' in their houses and treat it like a management guide, and we're talking about banning this sort of thing," Singh said.

Earlier this week, Indian law minister M. Veerapa Moily said that the central government would move to ban Lelyveld's biography, telling journalists that the book is “baseless, sensational and heresy and denigrating to a national leader," according to local news reports.

And on Wednesday the Indian Express newspaper quoted sources in the law ministry saying that Moily was seeking to amend the Prevention of Insults to National Honour Act of 1971 to make any action or gesture that shows disrespect to Gandhi an offense punishable as a crime. Moily later backed away from any legal action related to the book, saying, "My stand is that since the author has himself denied any adverse remarks on Mahatma Gandhi, no further action is required."

The current political furor stems more from sensationalist reviews than from Lelyveld's book.

"The word bisexual never appears in the book," Lelyveld told an Indian television station. "The word racist only appears once in a limited context relating to a single phrase and not to Gandhi's whole set of attitude or history in South Africa."

Even a cursory dip into the biography reveals that it is on the whole a generous and admiring portrait of India's most beloved leader, written in a matter-of-fact style that could hardly be called salacious.

But in the passages dealing with Gandhi's relationship with Hermann Kallenbach (the bodybuilder), Lelyveld clearly invites reviewers to make their own conclusions.

Calling Gandhi's friendship with Kallenbach "the most intimate, also ambiguous, relationship of his lifetime," Lelyveld quotes Tridip Suhrud, a scholar, as saying the two men were a couple.

Lelyveld asks rhetorically "what kind of couple were they?" in the same passage that he quotes Kallenbach as saying that they lived together "almost in the same bed" and Gandhi as saying he destroyed Kallenbach's "logical and charming love notes" to him.

And later, after warning that "selective details" can "easily be arranged to suggest a conclusion," he launches into a long description of Kallenbach's "taut torso," then quotes at length a letter in which Gandhi tells the architect and bodybuilder, "Your portrait (the only one) stands on my mantelpiece in the bedroom," and reveals that cotton wool and Vaseline "are a constant reminder" of his absent friend, whom he wants to show "how completely you have taken possession of my body."

Lelyveld never uses the word bisexual. But he invites readers to think it, first with suggestive language, and finally with a second rhetorical question: "What are we to make of the word 'possession' or the reference to petroleum jelly, then as now a salve with many commonplace uses?"

Lelyveld concludes with what appears to be feigned ignorance.

"The most plausible guesses are that the Vaseline in the London hotel room may have to do with enemas, to which [Gandhi] regularly resorted, or may in some other way foreshadow the geriatric Gandhi's enthusiasm for massage...."

Palin in India: The view from Delhi

Analysis: An Indian event may be a soft launch for Palin's presidential hopes, but many in Delhi are on gaffe-watch.

Bu Jason Overdorf
GlobalPost - March 18, 2011

NEW DELHI, India — Washington wonks see Sarah Palin's trip to India as a soft launch for her bid for the White House in 2012, but don't read too much into the guest list for the hyped conference, which both Palin's people and the event organizers are only too happy to remind you has included Nelson Mandela, Bill Clinton and George W. Bush. You don't, after all, get elected president by association.

Palin will no doubt receive a warm welcome and some easy laughs in India — an easy touch for anybody prepared to call it a major world power and wolf down a curry or two. But even though she'll appear on the same dais as Prime Minister Manmohan Singh at the India Today Conclave, an event organized by India Today magazine, the prevailing view here in Delhi is that the speech fest is primarily an exercise in hot air.

"Let me put it this way: There will be no serious political attention paid to what she says, but it will be watched with some curiosity to see what potential faux pas she may make," said former foreign secretary Kanwal Sibal.

Palin is unlikely to share a confab with the prime minister. She is on the guest list for the same reason she's invited anywhere. The conclave is not a peace summit; it's a for-profit enterprise designed to boost magazine revenue. And because of the circus that surrounds her — and the chance that she will say something surprising or baffling — Palin puts bottoms in seats.

Based on the title of her address, "My Vision of America," the speech is likely to sound familiar to Palin-watchers in the United States.

“I’m very excited to visit India. Americans have a great respect for the world’s largest democracy," an India Today Conclave press release quoted Palin as saying. “India and the United States are partners in trade and business affairs, and working together our two nations can build a more peaceful and prosperous world.”

But apart from gaffe-watching, the Delhi crowd will be curious to see if Palin dares to push the envelope in criticizing Pakistan to please the local crowd (and, perhaps, Tea Party "patriots" back home). For the live webcast, tune in March 19 between 8 and 9:30 p.m. Indian Standard Time (10:30 a.m. EDT).

Is the event likely to make Palin look good in India? You betcha.

Along with Singh, speaking at the conclave puts her in the company of Nobel laureate Mohamed ElBaradei, who was instrumental in toppling Egyptian dictator Hosni Mubarak, not to mention Bollywood superstar Shah Rukh Khan. And through serendipity, the conference theme, "The Changing Balance of Power," has compelled the event's public relations machine to cast Palin as "one of the contenders for the U.S. presidency" before she even throws her hat in the ring.


It's true that India (and Singh) loved President George W. Bush. But like Nixon once did in China, Bush won hearts with his pathbreaking work to slash through decades of ill-thought American policy and reshape U.S.-India relations — not with his aw shucks charm. And even among the biggest fans of the India-US civilian nuclear agreement that acted as the fulcrum for that new relationship, there were always serious reservations about the Bush Administration's other policies, especially in Iraq.

"He was seen as somebody who was committed to India and was willing to take steps contrary to longterm U.S. policy," said Sibal. "It wasn't an endorsement of the right in America."

Moreover, Palin isn't the first world leader to be going to the Indian well of publicity. She's not only following Bush, Clinton and Obama, but also French President Nicolas Sarkozy, British Prime Minister David Cameron and Russian President Dmitry Medvedev, among others.

"There will be enormous curiosity about her," said Mahesh Rangarajan, a political analyst with Delhi University. "But remember now that [praising India] has been done by several people. Three different U.S. presidents have done that in different circumstances. That's par for the course. So what's new?"

Following Palin's Delhi trip, she'll hop a plane and head for that "other" favorite location of ambitious U.S. politicians: Israel.

The Shiva Rules: India's new robber barons

A new Gilded Age threatens to make India the world's largest oligarchy.

By Jason Overdorf

GlobalPost - March 17, 2011

Editor's Note: The Shiva Rules is a year-long GlobalPost reporting series that examines India in the 21st century. In it, correspondents Jason Overdorf and Hanna Ingber Win will examine the sweeping economic, political and cultural changes that are transforming this nascent global power in surprising and sometimes inexplicable ways. To help uncover the complexities of India's uneven rise, The Shiva Rules uses as a loose reporting metaphor Shiva, the popular Hindu deity of destruction and rebirth.

NEW DELHI, India — Shortly after industrialist Anil Ambani exited the offices of the Central Bureau of Investigation last month after a taxing, two-hour interview, his $80 billion-dollar company issued a press release.

The Reliance Anil Dhirubai Ambani Group stated that Ambani had not been "summoned" by India's federal investigators but had simply met with them to clarify "ongoing issues" related to the telecom scandal Indian reporters have dubbed the 2G spectrum scam.

But the grim expression on the billionaire's face as the flashbulbs strobed told a different story. As impossible as it might have seemed just 24 hours before, this was a perp walk.

Over the past few weeks, that billionaire perp walk has turned into a parade, a veritable who's who of Indian business have visited the CBI offices to make their own "clarifications" — including Ratan Tata's right-hand man, Tata Realty CEO Krishna Kumar; the $15 billion Essar Group's scion and CEO Prashant Ruia; the $4 billion Videocon Group's Chairman Venugopal Dhoot; and the $650 million Unitech Group's Managing Director Sanjay Chandra.

“We still have economic might concentrated in relatively few people's hands.”

Their market muscle may well be the engine behind the Indian economy's projected 8.6 percent growth this year and their firms may well be fueling the rise of the Indian middle class — a phenomenon that will move nearly 300 million Indians out of poverty over the next two decades, according to McKinsey & Co.

But even though nothing has been proven in court and all of the companies involved have denied wrongdoing, in the eyes of the people, India's captains of industry have turned into robber barons overnight — with the Supreme Court instructing the CBI to go after the guilty "even if they are millionaires or feature in the Forbes rich list.”

Dark as the horizon seems, though, the current disgust could mark the beginning of a much needed correction.

Just as during America's Gilded Age, when bankers and industrialists like Andrew Carnegie, John D. Rockefeller and John Pierpont Morgan amassed their enormous fortunes, India's celebrated entrepreneurs have capitalized on the country's rapid economic growth to rocket up the charts of the world's rich list over the past decade.

But as Forbes feted the rise of the self-made Indian billionaire and free market champions credited the decision to liberate the economy from government quotas for manufacturing in 1991, some vital features of the enormous increase in India's wealth were overlooked.

Taking into account family associations, India's BusinessWorld magazine's list of this year's 10 richest Indianslooks a great deal like the list one might have drawn up in the 1980s — featuring Tata, Birla and Ambani — only the sums are vastly larger. Despite claims that Indian business flourishes in spite of the state, virtually every name on the roster has reaped dramatic gains through accessing or taking over government-owned resources.

Meanwhile, ever greater wealth has increased their influence in politics and control over regulatory policy — raising concerns that the world's largest democracy is quietly becoming the world's largest oligarchy.

"We are still relatively small as an economy and we still have economic might concentrated in relatively few people's hands," said Pramath Sinha, a former longtime McKinsey & Co. partner who founded 9.9 Media-Worx in 2007. "If you start writing the names down, you quickly run out of names."

Since 2000 or so, when India's "growth story" started to take off, the conventional wisdom has been that the dismantling of the so-called License-Permit Raj in 1991 had dealt a mortal blow to corruption — though it kept hanging on — and opened the field to a host of creative and dynamic entrepreneurs.

But the recent wave of alleged scams and an examination of the companies that have dominated Indian business since liberalization shows that the opposite may well be true: Government influence is as important as ever, and the state's dependence on its largest corporations to fight off global competition has given India's big industrialists even greater political clout.

Thus, as many as 15 of a recent list of India's 25 largest business groups were also among the top 25 in 1969, when the Monopolies and Restrictive Trade Practices Act came into effect, argues Surajit Mazumdar, a professor at New Delhi's Institute for Studies in Industrial Development.

"[Despite liberalization] things didn't really change that much," Mazumdar said. "If you had new entrants, it was essentially from within the set of large groups or international firms. So in a sense what you got was a process of competition between the big and the dominant."

To be sure, there are strong arguments for succeeding Indian governments' support of the country's dynamic tycoons. In the essay that coined the phrase "captains of industry," Scottish historian Thomas Carlyle told an England increasingly concerned about the plight of its workers at the height of the Industrial Revolution in the mid 19th Century, "Government can do much, but it can in no wise do all."

And in India, that seems especially true. As graft absorbs nine out of every 10 dollars spent on government projects, India's 10 largest business groups account for as much as a fifth of the entire economy. Ratan Tata's Tata Group alone accounts for as much as 5 percent of India's GDP, while Mukesh Ambani's Reliance Industries contributes another 3 percent and Kumar Birla's Aditya Birla Group adds another 2 percent.

It's therefore easy to see why state planners might turn the responsibility for providing the country's essential services to companies like Tata, which in Jamshedpur, the headquarters of its flagship Tata Steel, provides roads, utilities, health care and sanitation infrastructure superior to most Indian cities. After all, the land grants that built America's railroads in the Gilded Age not only helped create great fortunes for eight of the 40 richest Americans of all time, but also helped to quadruple U.S. gross national product and nearly double the per capita income of average Americans between 1865 and 1900, according to Northeastern University professor Ballard C. Campbell. For most part workers' wages also increased over the same period.

But critics of the business-friendly policies of India's own golden era say that under the auspices of stimulating industrialization and the building of houses, roads, bridges and ports, the country's leaders seems to have forgotten that government can do anything except give public land and resources to big capitalists — even as spending dwindles for the social programs intended to deliver "inclusive growth."

Given India's huge population, it's hard to imagine a scenario where industrialization creates a tight enough labor market to result in the kind of wage increases that America saw in its Gilded Age. And deals aren't only being cut to increase the wealth of the nation, they say; in the back room, the country's elected leaders are signing a raft of policies and contracts with the express purpose of lining their own pockets.

"Collusive arrangements exist in all the areas where the government maintains control over limited resources, whether it's minerals, forests, airwaves, frequencies, spectrum, water or land," said Praful Bidwai, a writer and activist who is among the most trenchant critics of the India's recent economic policy. "The land grab is extraordinary. It's never happened on this scale."

Perhaps that's why India's recent policies in areas like telecom, real estate and mining have seemed so flexible when it comes to accommodating the new robber barons.

The so-called 2G spectrum scam captivates India today. But the CBI allegations that billionaire industrialists used shell companies to violate regulations and engineered payoffs to former telecom minister Andimuthu Raja are only the tip of the iceberg. And while one might argue that the people have benefited from those allegedly corrupt deals with a rapidly growing mobile market and low airtime charges, that kind of justification is much more difficult when it comes to other government policies like the allocation of Special Economic Zones and mining rights.

Since 2005, India's SEZ policy has allowed corporate developers to acquire hundreds of thousands of acres of land, running roughshod over the protests of small landowners with the aid of the state. Supposedly to encourage employment-generating industries, India granted developers and zone-based businesses exemptions from import and export duties, excise and sales taxes, and up to 15 years of tax holidays on profits.

Yet most of the SEZs mushroomed in desirable areas where no incentives were needed, and many turned into residential real estate plays or IT sector office complexes. Moreover, few of the 400,000-odd jobs resulting from the scheme are of the type that could absorb the farmers that the zones displaced, and their net effect actually appears to have exacerbated, rather than reduced, inequality, argues Loraine Kennedy, deputy director of the Centre for South Asian Studies (CEIAS) in Paris.

Similarly, in the mining sector, various state governments have required forest dwellers and indigenous tribal groups to turn over mineral resources to industrialists like Vedanta Resources' Anil Agarwal. And while the industry displaced some 2.6 million people between 1959 and 1991 — most of them from indigenous tribes — the pace of mining clearances has accelerated dramatically in recent years according to a recent Times of India report that synthesized government data. Between 1998 and 2005, 216 mining projects a year were granted clearance to extract minerals from India's forests, compared with only 19 per year from 1980 to 1997, the paper found.

The resulting concentration of wealth is stunning. Going by the Forbes list, the combined wealth of the 10 richest Indians, at around $150 billion, accounted for 12 percent of the country's gross domestic product in 2010 — the annual income of some 150 million average people.

But it's the influence and sheer power of the new robber barons and the changing character of the Indian political system that's most disturbing. According to an analysis of mandatory filings conducted by India's Association for Democratic Reforms (ADR), the number of Indians in the parliament with more than 10 millionrupees in assets — known here as crorepatis — doubled from 2004 to 2009.

While it's true that America's Congress is also stacked with millionaires, the amount of wealth amassed by India's leaders over the past five years alone is remarkable: The assets of the average MP increased from around $400,000 in 2004 to around $1.2 million in 2009. Meanwhile, the composition of the committees that steer government policy has also changed.

"Money has been playing such a huge role [that] it's obvious," said ADR's national coordinator, Anil Bairwal. "If you look at the committee on finance, mostly industrialists are sitting on it. If you look at policy making, in the Lok Sabha [lower house] or Rajya Sabha [upper house] most people represent industry one way or the other."

Conflicts of interest go unmonitored or ignored. MPs in the lower house do not have to declare their interests in corporations, and the declarations of MPs in the upper house have not been made public — though a Right to Information request from ADR is pending. A similar RTI request revealed that no objections to the inclusion of an MP on any parliamentary committee on the grounds that he or she had a personal or financial interest in its affairs over the past five years, according to PRS Legislative Research, another civil society group.

And there were only two instances during the 2004-2009 session when upper house MPs voluntarily declared their personal stakes in the proceedings before speaking before the parliament, while no such declaration was made by lower house representatives.

Perhaps they didn't bother, thinking that the conflict of interest was glaringly obvious — with flamboyant Kingfisher Airlines promoter Vijay Mallya sitting on the civil aviation committee and enjoying day-to-day interactions with the minister.

But consider some of the cases illustrated by muckraking journalist Shafi Rahman in India Today magazine. During the 2004-2009 session, for instance, MP Nageswara Rao asked for details about the government's plans to build eight-lane expressways without mentioning that he also happened to be the non-executive chairman of the Madhucon Group — a company involved in a dozen-odd projects with the National Highways Authority of India.

Meanwhile, although the composition of parliamentary standing committees often changes during a government's five-year term, Rahman pointed out at the time that the standing committees on finance, industry, public accounts and health included tycoons with massive holdings in IT, media and cement, hotels and shipping and medical colleges — though on the parliament's website they ticked industrialist along with a laundry list of other professions, calling themselves agriculturalists, educationists and social workers. Since then, little has changed but the names of the players.

"They are writing policies more or less," said Bidwai. "This is something that perhaps not even Rockefeller or Morgan was able to do as successfully."

http://www.globalpost.com/dispatch/news/regions/asia-pacific/india/110316/india-economy-anil-ambani

What's to come of Free Tibet movement?

The Dalai Lama's decision to give up political role places the Tibetan freedom movement in precarious position.

By Jason Overdorf

NEW DELHI, India — Like his previous suggestion that he might pick his next incarnation before his own death, the Dalai Lama's move to withdraw from politics is a savvy move — this time to dilute the official powers of his office before China's pet monks can begin wrangling with Buddhist leaders in exile for the right to choose his successor.

But will the rough and tumble of parliamentary democracy also dilute international support for "Free Tibet"?

Observers say that the common people of the Tibetan exile community in India, at least, are nervous about the decision. But the Dalai Lama will likely retain his role as the symbolic head of the Tibetan exiles, and his sway over affairs will remain supreme if he chooses to wield it.

"He's trying to take less political responsibility and focus more on the spiritual dimension," said Srikanth Kondapalli, a professor in Chinese studies at Jawaharlal Nehru University. "But it doesn't mean that he will go away from the scene. Obviously the Tibetan community is highly religious, which means regardless of who is the prime minister, regardless who is the speaker of the parliament in exile, or the cabinet ministers, they will go ahead with the Dalai Lama."

That's true. But it also means that the Dalai Lama is the only leader who enjoys the complete trust and full support of the entire community. Democracy may bring a new kind of factionalism to Tibetan exile politics — where some groups reject the Dalai Lama's decision to settle for autonomy rather than independence and a radical fringe questions the resistance movement's commitment to nonviolence.

"There are factional, divisive politics within the Tibetan community," said Abanti Bhattacharya, a professor in the Asian studies department of Delhi University.

Moreover, exiled Tibetans are likely apprehensive because the move comes as alleged corruption scandals highlight the possible pitfalls of politics in the government-in-exile's host country, India. And it closely follows an ugly round of corruption allegations that implicated the third-highest Tibetan Buddhist religious leader, the Karmapa Lama — which reminded the exiles of their vulnerability, though the devout never gave the accusations much credence.

"As early as the 1960s, I have repeatedly stressed that Tibetans need a leader, elected freely by the Tibetan people, to whom I can devolve power," the Dalai Lama said in a speech Thursday to mark the 52nd anniversary of the 1959 Tibetan [3] uprising against the Chinese government in Llasa.

China quickly interpreted the statement as "a trick," as the religious leader has talked of stepping down in the past. But this time — to the dismay of many exiled Tibetans — he gave a specific date for his withdrawal from politics, saying he would propose the necessary amendments to the constitution of the parliament in exile on March 14.

"I'm sure the Tibetan people have been talking about the statement yesterday [announcing the Dalai Lama's retirement]," said Tsewang Rigzin, president of the Tibetan Youth Congress, an exile political party. "But at the same time we have to understand that his holiness has said many times that he's in semi-retirement and the current prime minister [of the government-in-exile] is his political boss. As far as we know His Holiness' vision is to have a truly democratic Tibetan society."

That line will make things difficult for China, forcing the Chinese government to talk with the elected government of Tibetan exiles, rather than their religious leader, if they are to hold any negotiations at all. And by devolving his political powers to elected representatives, the Dalai Lama is implicitly challenging the Chinese leadership to do the same thing at a time when it is already under international and internal pressures.

"[This means that] the future will be more complicated for the Chinese," said JNU's Kondapalli. "If you consider them as portions of China, a lot of portions of China are getting democratized, while the central government is not. For instance, Taiwan, Hong Kong, and now the Tibetans in a massive way. It will put a lot of pressure on the Chinese, especially after the Egyptian and Libyan developments."

At the same time, by diluting his political role and delegating more power to the elected government in exile, the Dalai Lama has acted to forestall a leadership crisis after his death. There is bound to be a contest between China's Tibetan representatives and the exiled monks to choose his next incarnation, which could end with the Chinese government effectively selecting the Tibetans' supreme religious leader. And regardless of who makes the selection, the present Dalai Lama's successor will be a small child, which would leave senior monks wrangling for influence.

"[Currently] the Dalai Lama has sweeping powers," said Kondapalli. "So it's better to amend the constitution and let the elected representatives deal with the day to day affairs, rather than [risk] a Chinese-appointed Dalai Lama running roughshod over everybody — because [otherwise] the sweeping powers will be there for the next Dalai Lama as well."

India: the new East India Company

The flagship of the British colonial empire comes back as a luxury brand.

By Jason Overdorf - GlobalPost
(February 16, 2011)

NEW DELHI, India — Once upon a time, the East India Company toppled governments, enslaved peoples and staffed a private army and navy to rule the world of commerce — then dominated by tea, coffee and exotic spices.

Now Sanjiv Mehta, a 48-year-old British Indian businessman, believes it's time for the ultimate symbol of colonial oppression to make a comeback — you guessed it, as a luxury brand.

"Wealth is moving from the West to the East, and all the luxury brands are typically brands which originated in the West," Mehta told GlobalPost. "[In that context] the East India Company is an interesting brand because Asia looks at it as the old West and the West looks at it as the exotic East."

An Indian buying the East India Company is a gimmick that makes good copy, of course. But the East India Company is actually the real deal.

Having been nationalized after the 1857 rebellion in India that Britain dubbed "the mutiny" despite its revolutionary character, the "brand" was lying virtually forgotten in the hands of the British crown and a handful of apathetic shareholders when Mehta ran across it in 2004. He snapped it up — along with the original coat of arms and merchant's mark — and set about sourcing some $15 million in investment capital to put it back on the map.


According to company lore, Mehta then spent six years meeting museum curators and examining company artifacts to make sure he got the image right before he finally launched the flagship store in London last year.

"It was a long journey," Mehta said.

The London launch received predictable fanfare. This year, though, will be time to put up or shut up, as the East India Company goes back to its colonial roots in Hong Kong, Singapore and India, where the $7 billion Mahindra Group announced it was taking a minority stake in the brand in January.

"India, Singapore and Hong Kong were huge locations for the East India Company," Mehta said, recalling the company's role in forming each of these nations. "We definitely have a very aggressive plan to enter all these markets," he added. "We will be entering with our fine foods business in India in 2011, starting from Bombay."

Mahindra, which knows the market, is optimistic. "The East India Company (EIC) is a truly global brand and can transverse across multiple product categories," Parag Shah, managing partner in Mahindra's investment arm, said in a press statement. "This 400-year-old brand is the first modern transnational brand and in a sense, the founder of the phrase 'international trade.'"

But will colonial chic sell in the colony that lent the company its name?

"The relationship of India with its colonial past has always been surprisingly without rancor, and the fact that some Indian businessman is reviving the brand is not without irony and all that," said Santosh Desai, chief executive of Future Brands. "But it's a symbolic kind of move. It's hardly likely to be a significant brand in a real sense."

The new East India Company sells posh chocolates, tea and coffee and the kind of condiments that old India hands used to whinge were always running out (mustards, marmalade — but not Marmite), as well as gold bullion. But in all of those product categories, it's likely to find that the same economic and cultural developments that have refurbished the old colonial brand as politically correct will also make its former home market a tough nut to crack, says Desai.

To be sure, India has shed its postcolonial baggage. There are still gin and tonics and whisky sodas at "the club" for the old Indian elite, and condo complexes with pretentious-sounding names like the Wyndham Estate. But these days, the cricket team expects to thrash the Brits soundly whenever they meet, and the players are as apt to call their white opponents "sir" as they are to sprout wings and fly.

Young people no longer strive for "propah" British accents — or even American ones — preferring the free-flowing mashup of Hinglish to any other lingo. And the most popular foreign grub — American fast food — must be thoroughly Indianized before it will sell.

"In general, 15 years ago there was a presumption of superiority for an international brand in all sorts of categories," said Desai. But that's no longer the case — even when it comes to products like cars, refrigerators and stereos. "For a whole set of general brands, in everyday categories, Western brands have become commonplace, and the distinction between Indian and Western brands has become less significant."

For luxury brands like the East India Company aspires to be, that's not strictly the case, though one increasingly finds the collections of top Indian designers alongside clothing labeled with Armani or Zegna — and Jaguar, of course, is already owned by Tata. The Haagen Daaz outlet in New Delhi's most popular mall, for instance, is almost always packed even though — or perhaps because — its ice cream costs nearly $10 a scoop.

But brand-conscious consumers are conservative in India — where class distinctions are rigid, and the gossip is vicious. So however long its history, East India Company may find it tough to compete with established brands.

Killing India's Right to Information law

India's most vital tool for fighting corruption is bleeding from a thousand cuts.

By Jason Overdorf - GlobalPost
(February 15, 2011)

NEW DELHI, India — Empowered by a groundbreaking new law designed to help ordinary citizens fight corruption, Jagdish Sharma took on the leading clan of his village to expose the alleged theft of an elderly residents' pension money last week. But his triumph was short lived.

Just days after Sharma filed his case against the village head, Dharambir Malik, using India's Right to Information (RTI) act, Malik allegedly plowed down Sharma and several other protesters with his SUV — crushing Sharma's legs and killing his daughter-in-law, Sonu, according to local press reports. And though police say murder charges have been leveled against Malik, India's RTI crusaders argue that Sonu's death is the latest in a thousand cuts that are slowly killing the country's most powerful tool in the fight against corruption.

"This is a message to anyone raising their voice against corruption, that you will be killed," said Arvind Kejriwal, one of the leaders of the decade-long campaign for the RTI Act.

At least a dozen whistleblowers have been murdered for daring to expose crime and corruption since the RTI act was passed in 2005, according to activist Parshuram Ray. But rather than strengthening the law and fighting to protect the citizens who use it, the government is backpedaling fast to strip RTI of its sweeping powers, even as politicians and bureaucrats have adopted an informal go-slow policy that threatens to make it obsolete.

Already, by 2015, the Central Information Commission — the body responsible for addressing complaints when officials give incomplete or evasive answers to RTI requests — will face a backlog of 90,000 cases, which means an applicant would have to wait up to six years for an appeal. And the situation is all too likely to get worse.


"Despite all the provisions of the act, at every level information is being denied, and nothing is happening. Nobody is being punished for that," said Ray, who faced stonewalling when he sought to use RTI to expose corruption in a national program that provides work and wages for the rural poor. "The reality is that the original aims and objectives of the RTI act have almost been shattered."

The success or failure of these efforts to hamstring India's information law could well mark a turning point in the country's escalating battle against corruption, as well as the struggle for basic human rights.

The volume of alleged corruption exposed in recent months has been dramatic enough to raise fears that failure to rein in crony capitalism could derail the India rise to prominence on the global stage — especially after it was revealed that foreign direct investment has plunged 60 percent this year.

But the drama might actually be a sign of progress — showing not that corruption is increasing by leaps and bounds, but that more and more scandals are coming to light. And as bruised and battered as it may be, say some activists, that's down to the RTI. Not only did the act play a direct role in exposing two of the largest recent corruption scandals involving the telecom and defense ministries, says Nikhil Dey, another RTI pioneer, but it has also made it much easier for whistleblowers inside government to leak information without fear of reprisals, since an RTI filing from a newspaper is a speedy way to end a witchhunt.

"Once you enter the domain of open information, even a leak is legitimized much more," said Dey. "Before, the press had to think of a million ways to legitimize the information, because otherwise their source would be traced and persecuted. Now, because RTI is so extensive and powerful, it makes it very difficult for someone to say, 'How did this information get out?'"

Indeed, when it was passed in 2005, the RTI act promised a sea change in governance. By granting citizens the right to demand transparency, it swept out the colonial era practice of denying access to even the most mundane details of government programs under the official secrets act. It sought to pre-empt bureaucratic sloth and obfuscation by requiring government departments to respond to requests within 30 days. It mandated that every department computerize and make public its records proactively so that citizens could eventually access most information without filing a request. And it put in place stiff penalties for officials who refuse to comply.

But as individual citizens and civil society groups discover more and more ways to use the law, various efforts to undermine the RTI are gathering momentum. Virtually no department has voluntarily complied with the provision requiring proactive disclosure. Everyone from the Supreme Court to the Central Bureau of Investigation is fighting to be declared exempt from information requests. The government is seeking to amend the rules governing RTI requests in a move that activists say would make the procedure more arcane and thus make it easier for bureaucrats to justify stonewalling.

The information commissions are also being starved of resources. There are only six central information commissioners instead of the allotted 11, for instance, and limitations on hiring additional staff prevent them from clearing their backlog of complaints. Meanwhile, at the state level matters can be even worse. In Orissa and West Bengal, for example, the information commissioners are so far behind that they'll need more than 10 years to clear their present backlog of complaints, according to a survey by the Public Cause Research Foundation — and that's if they don't receive any appeals over the next decade.

"The reluctance to part with the information is just part of an old mindset," said Dey. "Very often if bureaucrats meet together they exchange notes about how they can avoid revealing information."

And that teamwork might be working, according to Anjali Bhardwaj, who heads Satark Nagrik Sangathan, an non-governmental organization that trains citizens to use the RTI act. At the grassroots level, India's bureaucrats are getting more and more clever at sidestepping the law. Aware of the long delays of an appeal, officials routinely refuse to disclose basic information about government activities by claiming it would violate the right to privacy, require applicants to prove their citizenship before they'll accept the request, or use the arcane structure of the bureaucracy itself to send them from one public information officer to another like Kafka's man before the law.

In the latest twist, most government bodies are putting low-level functionaries in place as public information officers so that even if they are sincere they don't have the clout needed to get documents from their colleagues.

"It clearly looks like a very deliberate move in government departments," said Bhardwaj.

India-Pakistan talks: read between the lines

Analysis: It's official. New Delhi lost the stalemate.

By Jason Overdorf
(February 11, 2011)

NEW DELHI, India — Nominally, India and Pakistan agreed to resume [2] high level peace talks Thursday.

But in reality, New Delhi bent over backwards to give in to Islamabad before the proposed negotiations even begin — by granting the Kashmir dispute equal status on the agenda with the 2008 terrorist attacks on Mumbai.

So how did India go from refusing to talk to begging for talks?

New Delhi believes that it has no choice but to talk eventually and surmises that the anger over the Mumbai attacks has faded enough over the past two years to make a resumption possible. Meanwhile, with the expected drawdown and eventual withdrawal of U.S. forces in Afghanistan on the horizon, India may believe that a magnanimous stance today could help it to negotiate a stronger post-conflict role for itself in Kabul.

"I think it was necessary for us to discuss Afghanistan ... ," Indian foreign minister S.M. Krishna [3] told reporters in New York Thursday, according to the Times of India newspaper. "India has been playing a very positive role in trying to build Afghanistan in terms of our volunteers who have gone there for capacity building and so I think Afghanistan had to be included," the paper quoted Rao as saying.

Unfortunately, what's more likely is that resuming the dialogue will just give Islamabad — which is wary even of India's limited present role in Afghanistan — another chance to run circles around India's negotiators.

Already, India has agreed to discuss a whole range of issues, including Pakistan's claims to territory in Indian-administered Kashmir, which will inevitably remove the focus from Pakistan's alleged support of terrorist groups that attack India.

At a 90-minute meeting between Indian foreign secretary Nirupama Rao and her Pakistani counterpart Salman Bashir on the sidelines of the South Asian Association for Regional Cooperation meeting in Thimphu, Bhutan, on Sunday, the two countries agreed to a series of secretary-level meetings to discuss, among other issues, confidence-building measures like cross-border bus services, the dispute over Sir Creek (between India's Gujarat and Pakistan's Sindh province) and Pakistan's desire to redraw the borders of Kashmir.

"The reality is that India and Pakistan cannot afford to turn their backs to each other, that they must engage in dialogue which is, as I said, serious and sustainable and comprehensive," Rao said in a televised interview on Thursday, when the substance of the Sunday meeting was disclosed.

It's taken two years, but that's a pretty big flip-flop.

Once, India claimed it would not resume normal diplomatic relations until Islamabad cracked down on terrorist groups operating with impunity in Pakistan and began a vigorous prosecution of the alleged perpetrators of the November 2008 terrorist attacks on Mumbai. That vigorous prosecution never happened, of course. But as the United States proved unable to exert any pressure on Pakistan and instead began pressuring India to return to the negotiating table, New Delhi swiftly went from refusing to talk to begging to talk.

To make matters worse, China stepped up to back Pakistan's military shadow government. And events like the assassination of Punjab governor Salman Taseer for opposing Pakistan's blasphemy laws — which suggest that Pakistan's radicals are gaining ground — have convinced India that it has no choice but to backpedal. Playing hardball, the logic runs, will only give Pakistan's hardliners more room for saber-rattling — and more credibility on the street. If it wasn't clear before, it is clear now: India has lost the stalemate.

"Any rational observer would say this is not the time to nourish much hope on moving forward on substantive issues," said former Indian foreign secretary Kanwal Sibal. "But on our side they feel that vacuum is not in our favor and by not talking we would be giving up whatever little hope there is ... of stemming the rise of these radical forces and giving some backing to those who wish to normalize relations with India — especially Pakistani civil society."

But preventing Pakistani hardliners from playing the India card comes at a cost. The presumption that Qureshi will visit India in July to review the progress made by the two countries' foreign secretaries over the intervening months underscores the impression that India must woo Pakistan, even to merit a visit from its foreign minister. And it's far easier to make friendly noises now — when Indian-administered Kashmir enjoys a predictable winter lull in separatist protests — than it will be when Srinagar inevitably heats up for the summer.

At the last meeting between Indian and Pakistani foreign ministers last July, for instance, when Srinagar was rocked by bloody riots over the killing of civilian by Indian security forces, Qureshi sandbagged during meetings with Krishna in Islamabad. Then Qureshi undermined any possible gains at the post mortem press conference by equating a top Indian official with Hafiz Saeed — the Pakistani radical whom India believes masterminded the 2008 Mumbai attacks, and whose continued freedom and influence in Pakistan is a major impediment to better relations.

Indeed, if past talks are any indicator, nothing is likely to emerge from more dialogue. Though talking with Qureshi does grant Pakistan's democratically elected government an added stamp of legitimacy, in order to make progress India needs to negotiate with the real center of power in Islamabad — Gen. Ashfaq Parvez Kayani, who heads the Pakistani army.

Moreover, Manmohan Singh's government is in a weakened position domestically, and recent revelations about the involvement of Hindu terror cells in the bombing of a "Friendship Express" train between Delhi and Lahore — in which 42 Pakistani citizens were killed — has undermined India's previous position of moral superiority.

"The jury is still out on these talks," said Indiana University professor Sumit Ganguly. "Any progress, will necessarily be extremely slow and incremental. The level of distrust in India is too great and the PM is too weak with the opposition in an uproar about multiple [corruption] scandals."

By caving into Pakistan's demands up front and allowing Kashmir and "all outstanding issues" back on the table, India has essentially admitted that it has nothing to negotiate with. The threat of war is an empty one (thankfully), and generous aid from an opportunistic China and a fearful United States renders India's economic clout meaningless.

"The stick we have we can't use, and the carrot that the Pakistanis want [Kashmir] we can't give them," said Sibal.

A Bend In The River

The fabulous Darbargadh Palace in Morvi opens its doors.

JASON OVERDORF
Outlook Traveler - Feb. 1, 2011

In the interest of full disclosure, I confess that I’m an easy enough heritage tourist. To me the mark of a good hotel has never been the variety of pillows on the bedside menu or the number of 20-something management trainees deputed to be my personal slaves. I am not in business. I have never sent an urgent fax in the pitch-black night. I like to feel comfortable, and I am not comfortable with absurd efficiency—which so often comes to resemble its opposite—or with making a dozen decisions before something so simple as turning off the light and drifting off to sleep.

A little charm and character makes up for a lot of opulence, and I don’t mind wearing a sweater in my room or running the tap for ten minutes to get hot water.
Fortunately, the Darbargadh Palace, a new heritage hotel in Morvi, Gujarat, has that charm and character in spades.

Opening to tourists this month, Darbargadh is a stunning, nineteenth-century neoclassical palace that has been lovingly restored by the Neemrana Group and Maharani Uma Dubash Morvi. The oldest of the region’s palaces, its stone walls tower over the meandering Macchu river alongside a swaying footbridge, but it feels less like a fortress than a mansion. Only seven guest rooms have been restored so far—there is an entire wing, equally large, that remains untouched—so, intimacy is the rule.

Unlike some heritage properties, there are no poor rooms here. Every room is a vast suite, with bedroom, dining area, sitting room and a colossal bathroom that would dwarf many a Manhattan studio, and the Maharani, who personally chose the décor, has beautifully recreated the neoclassical ambience with rich details like the embroidered cloth tapestries—specially woven by some of the world’s largest looms in Jaipur—which grace the stone instead of paint or wallpaper.

Each room boasts a distinguishing feature that gives it character, a marble fireplace or carved frieze, and wherever possible the designers have retained and accentuated elements of the palace’s original structure. The Kesarba Mahal I stayed in, for example—which was chosen for the terrace overlooking the Macchu—had an exposed stone archway separating the bedroom from the seating area, while the Mahindra Mahal boasts an original stone frieze depicting characters from ancient Greece.

The town of Morvi—a sleepy hamlet, known mainly for tile manufacturing, in the centre of a dry state—is, of course, not on the usual tourist’s itinerary. Morvi is only an hour from the airport (and railway station) at Rajkot, and there are a few attractions within striking distance in Dhrangadhra, Wadhwan, Maliya and Limbdi—each of which boasts palaces, stepwells and rustic bazaars. The only real ‘sights’ in Morvi are the hanging bridge and the Wagh Mandir, a 70-year-old temple of Jaipur stone that is currently being restored and expanded into a museum dedicated to the region’s royal past.

Darbargadh itself is the only true reason to stop here, most likely en route from Ahmedabad to Kutch. But Neemrana is renowned for turning hotels into destinations, and Darbargadh seems likely to uphold that tradition. Over my two-night stay, I never felt the least inclined to step outside the palace, whose high, thick walls kept out the noise of the city so that I could hear only the parakeets and songbirds as I lounged by the swimming pool in the courtyard with my Kindle. The winter sun was warm and bright, and from the terrace attached to my room I could look out over the tenant farms on the floodplain the way Maharaja Waghji Rawaji Thakore must have done in 1885.

The food at Darbargadh was excellent, and the service impeccable—as personable and informal as a trusted family retainer. Each morning, I devoured a stack of aloo parathas, a plate of sharp cheddar cheese and a basket of toast fingers with homemade jam, yet I always seemed to find room for lunch and dinner. As the hotel’s first guest, I had the luxury of ordering whatever I felt like (there was no menu), but I left it to the chef to try to impress me with his specialities, and once I convinced him that he didn’t need to make everything foreigner-bland, the eclectic feasts he prepared—think devilled eggs, penne arrabiata, mashed potatoes and mutton rogan josh—never failed to satisfy.

Only when it came time to leave did I venture out for a brief tour, stopping at the Wagh Mandir for an impromptu lesson in the techniques that the builders from Structwel—the same outfit that repaired the Taj Palace after the Mumbai attacks —were employing to fortify the cupolas damaged by the 2001 earthquake. Vipul, the hotel manager, had also arranged for me to visit the ‘new palace’ across the river, which the Maharani maintains as a part-time residence, so I spent the rest of the morning on a private viewing of the country’s finest art-deco palace outside of Jodhpur’s Umaid Bhavan.

When I left I was stuffed, rested and fully content, my only worry that I was returning to Delhi and work, instead of on down the road to Bhuj and further adventures.

The information

Location Morvi, Gujarat; three-four hours by car from Ahmedabad/one hour from Rajkot
Accommodation Seven suites (Vijayba, Kesarba, Bajiraj, Waghji, Lakhdir, Mahindra and Mayurdhwaj Mahals)
Tariff Rs 8,000 (Vijayba, Kesarba, Lakhdir, Mahindra, Mayurdhwaj); Rs 10,000 (Bajiraj, Waghji)
Contact 011-46661666, neemranahotels.com

India's "black money" trail

Why won't the government go after billions of dollars in stolen taxes?

By Jason Overdorf
(GlobalPost - January 28, 2011)

NEW DELHI, India — If it's true that Indians have stashed more than $450 billion abroad, why doesn't the government appear to care?

The stakes are high. According to international money-laundering watchdog Global Financial Integrity, the unreported overseas funds, or so-called "black money," amounts to a whopping 35 percent of the country's total gross domestic product.

And yet, the Indian government appears to be protecting these tax evaders, despite the fact that the money may be linked to terrorism, the arms trade and drug trafficking. The government has refused to divulge the names of 26 tax evaders with secret accounts abroad — possibly due to links to prominent politicians.

On Thursday, India's Supreme Court blasted the government for withholding the information.

"What steps have you taken? Have you set the law in motion?" the court demanded of solicitor general Gopal Subramanium, who has done everything in his power to avoid releasing the names of the tax evaders.

Though billions of dollars in lost tax income means India has that much less to spend on vital programs designed to uplift its poverty stricken people, there's more to the picture than tax evasion.

With a new corruption scandal surfacing seemingly every week, India's image with global investors has already been tarnished. And by dragging its feet on chasing black money, Manmohan Singh's United Progressive Alliance (UPA) government risks compounding the damage done by the alleged $500 million rice export scam [2], $1.5 billion Commonwealth Games scam [3] and the $40 billion 2G spectrum scam [4] — among many other scandals.

But most importantly, failure to stop the crony capitalism at the root of the black money trail could derail the economic rise of India — where the UPA is preaching "inclusive growth" but the country's 10 richest tycoons account for one-tenth of the entire economy.

This current controversy began in 2009, when former law minister Ram Jethmalani (an opposition legislator), former secretary general of the parliament Subhash Kashyap and several other prominent citizens filed a petition, alleging that the government hasn't taken effective steps to recover illegal funds secreted abroad.

The petitioners' case was strengthened in May 2010, when the government was virtually forced to accept a list of Indians with secret bank accounts in LGT Bank of Liechtenstein — part of a much longer list that Germany that had obtained from a former bank employee in the so-called "Liechtenstein Affair."

In fact, and ridiculously enough, when Germany first offered India the names of the Indian Liechtenstein tax evaders in 2008, the government did its best to avoid accepting them. Then, when it finally accepted the list, the government routed it through the prime minister's office and the directorate of enforcement so that citizens could not demand that the names be divulged through the country's powerful Right to Information Act.

"It's rubbish," said Supreme Court lawyer Kamini Jaiswal. People have a right to know, and this information must be divulged."

While Germany and the United States have already used the information about secret accounts in Liechtenstein to recover millions of dollars and prosecute tax evaders, India has made little progress on either score.

"Either they are protecting their own party members or the corporates who have bribed them," said Supreme Court lawyer Prashant Bhushan.

If India were to ratify the United Nations Convention Against Corruption — which India signed in 2005 but is still "studying" — the government could not only divulge the 26 names that Germany revealed but also the names of countless others, he argues. "If they were serious about investigating this illegal money they could easily do so," Bhushan said.

The Indian government has been roundly criticized by the Supreme Court and opposition parties for failing to publicize the names of the individuals involved or launch proceedings against them.

"You know the names and where the money is," the Supreme Court admonished on Thursday. "What action have you taken when you came to know that they have stashed money in foreign banks?"

For its part, the government claims that it cannot follow the money trail because of confidentiality clauses in its double-taxation avoidance agreement with Germany. But critics suggest that argument, as well as claims that the names cannot be divulged without compromising the investigation into the offenders, are just stalling tactics to protect unknown powerful people on the list.

"That [argument] is utterly dishonest," said Bhushan. "Germany openly offered this information to all the countries. It was not even information pertaining to German entities. It was pertaining to account holders to a bank in Liechtenstein, so there was no condition that it would not be revealed."

One of the reasons for the government's prevarication, says Bhushan, is that the illegal funds may also comprise billions of dollars in bribes paid to political parties and public officials.

The signs are pretty grim. Even as prime minister Manmohan Singh has been fighting the impression that his government has allowed corruption to thrive, his solicitor general has been battling tooth and nail to stall the investigation into ill-gotten gains.

Meanwhile, though the Supreme Court has taken an aggressive stance in this case, the judiciary is itself under fire for alleged corruption — after battling to prevent its judges from being forced to reveal their financial assets. As it turns out, the head of the central vigilance commission responsible for investigating all this alleged chicanery was appointed even while he himself faced corruption charges in his home state.

"The watchdog for corruption cases is touted to be corrupt, the judiciary that's looking into the matter is apparently corrupt, and the government is now defending people involved in black money and money laundering," said a lawyer close to the proceedings. "It's quite incredible."

Copyright 2010 GlobalPost – International News
Source URL: http://www.globalpost.com/dispatch/india/110128/india-corruption-tax-evasion-manmohan-singh

India: Can tourism trickle down?

"Heritage" tourism moves from the palace to the hinterland.

By Jason Overdorf
(GlobalPost - January 27, 2011)

MORBI, Gujarat — Far below the terrace of the Darbargarh Palace in Morbi, Gujarat — once the fiefdom of a minor Indian prince — tenant farmers plow the floodplain beside the meandering Macchu river.

Car horns blare faintly in the distance. Across the water, smokestacks from the town's many tile factories gently puff soot into the sky. A parakeet swoops onto the terrace. Room service arrives with breakfast.

As the first guest to sleep under Maharani Uma Dubash Morbi's roof since she turned this 19th century, neoclassical palace into a hotel, I was surely at the frontier of so-called "heritage tourism."

"Heritage tourism" is the rubric that India uses for the forts, palaces and havelis that savvy or desperate owners have converted into hotels to prevent them from falling to ruins.

Once upon a time, virtually the only heritage hotels belonged to the grand Maharajas of Jaipur, Jodhpur and Udaipur in Rajasthan — the Indian state created from the erstwhile kingdoms of Rajputana, "the land of kings." These days India's rapid economic growth and a new Indian confidence about the country's postcolonial identity is bringing heritage tourism to the hinterland.

"Now we see a lot of people doing heritage tourism," said Prateek Chawla, co-owner of New Delhi-based Outbound Travels. "Everybody is restoring old properties. It's a big trend, and now it's moving to smaller places, with smaller, boutique hotels."

On the grand scale, the conversion of India's palaces into hotels began in Rajasthan in the early 1980s, after then-Prime Minister Indira Gandhi abolished the privy purses with which the erstwhile royals had sustained their colossal properties.

Suddenly robbed of a lifestyle that would put Fifty Cent to shame — with bathtubs filled with champagne, Rolls Royces made of gold and palaces that glistened with precious gems — first the Maharana of Udaipur, then the Maharajas of Jaipur and Jodhpur each converted their various properties into hotels or museums to avoid bankruptcy, turning the state of Rajasthan into India's leading tourist destination.

Soon, the former kings had outsourced the management to professionals, and Taj Hotels and Oberoi Hotels, India's top luxury chains, were dominating the business (Oberoi with spanking new, imitation palaces that rivaled the real ones).

But the acknowledged pioneers of the trickle-down movement, Aman Nath and Francis Wacziarg of the Neemrana Group, are of humbler origins. They first showed that even the tiny castles of obscure royals could turn a profit when they bought and restored an otherwise unremarkable 15th-century fortress in tourist-poor Haryana and converted it into a hotel in 1986.

Today, the Neemrana Fort is the flagship of a company that operates 23 intimate heritage hotels on the fringes of the traditional tourist's itinerary. Moreover, as the recent addition of Morbi's Darbargarh Palace shows, they are now pushing even harder to draw tourists into the unexplored heart of India — and that's providing new hope that India's rich architectural and cultural heritage will survive.

"For all people with ancestral properties, we at Neemrana have come to represent a company who turns liabilities into assets," said Nath. "By that logic, every week we get one or two offers from people who want us to buy or manage their forts or palaces. We're buried by it. We're forever looking at properties."

That could be a big boost for India's forgotten places. According to the Ministry of Tourism, the travel industry — which generates substantially more jobs per dollar of investment than either agriculture or industry — can be a major source of employment and economic growth in areas of India that have yet to benefit from the current boom.

To capitalize, the country will need to draw more tourists — last year 5.6 million foreign tourists visited India, generating nearly $15 billion in revenue, but tiny coup-plagued Thailand, next door, saw 15 million tourists spend nearly $20 billion. But it will also need to draw travelers to rural areas and smaller towns, which is one of the national tourism policy's expressed goals.

Some of Neemrana's core properties are in strong locations for tourism — like the Glasshouse on the Ganges, near the Hindu pilgrimage town of Rishikesh, or the Hotel de L'Orient, in the one-time French colony of Pondicherry. But the latest additions are pushing the idea — common throughout Europe — that a charming hotel can itself draw tourists to places like Patiala, where the group operates the Punjab's first heritage hotel in the 19th-century Baradari Palace.

"What we claim to do is give an authentic image of a particular area, by sticking to the way the palaces were furnished in the olden days and serving the food of the area and also employing the local people so the body language belongs to that area," said Wacziarg. "The entire approach to hospitality is different."

Take Morbi, for example. The closest sizable city to this small, industrial town is Ahmedabad — the better part of a day's drive away — and even that city struggles to attract many tourists, not least because alcohol is forbidden in Gujarat. Apart from Darbargarh, the only real attractions in Morbi itself are a couple clock towers, a swinging footbridge that spans the Macchu, and a Hindu temple that's only 70 years old. Yet Neemrana's founders are confident that they can make the old palace go as a hotel, and in the process introduce seasoned tourists to rarely visited sights such as Lothal — an ancient harbor city of the Indus Valley civilization that dates back to 2400 B.C.

"We think when you put somebody out in the wilderness, you will find some 1500 or 1000 year old site," said Nath. "For the real traveler, it's very hot to make private discoveries, not just to go to the Taj Mahal."

India's profit-minded entrepreneurs aren't far behind. Along with older firms like HRH Hotels (where HRH stands for His Royal Highness, the Maharana of Udaipur), large hotel companies like ITCWelcom Group's WelcomHeritage and smaller upstarts like the Pachar Group are restoring properties and forming marketing tie-ups with otherwise isolated hoteliers. WelcomHeritage, for instance, which handled just five heritage properties in 1997, now markets 67 small, niche hotels in 18 states.

"There are a lot of smaller agents doing similar work," said Pankaj Gupta, Chawla's partner at Outbound Travels. "They get a bigger commission from the heritage properties, which they add on and send to people like us. They're only doing B2B work, and they've made people like us aware of the products."

Copyright 2010 GlobalPost – International News
Source URL: http://www.globalpost.com/dispatch/india/110118/india-tourism-heritage-palace

India's red-hot art scene

What will it take for the Indian Art Summit to be the next big thing?

By Jason Overdorf
(GlobalPost - January 23, 2011)

NEW DELHI, India — Inside New Delhi's Pragati Maidan convention center, workmen with electric drills, staple guns and masking tape rushed to hang paintings, power up video installations and position sculptures for the public opening of India's largest art fair today.

The atmosphere was frenetic, and the exhibitors were harried, but the excitement and optimism was palpable.

"It will take a few more years to get established as a significant international art fair, but I'm very optimistic about it because of the circumstances and focus on India," said Gigi Scaria, an artist with several works for sale here. "The world is turning toward India, so that momentum is crucial."

In its third year, the India Art Summit, which opens to the public today, is staking its claim as the next big art fair on the international calendar — hoping to compete with London, Miami and Basel within the next decade. Lured by India's red-hot art market and growing number of art buyers, some 75 galleries will participate, top experts will speak on art in emerging markets and an education series will be conducted to inform buyers.

But even as more and more contemporary Indian artists cross the $100,000 threshold and experts predict the market will grow more than 10 times by 2018, artists and gallery owners are concerned that India lacks the institutions needed to build a strong body of serious, knowledgeable collectors.

"That's down the road," said Deepak Talwar, whose New York-based Talwar Gallery promotes several prominent Indian artists. "The amount of time it takes to get there will not just depend on the [Indian Art] Summit or any one factor. The biggest factor that will influence that is even some small interest from the government in terms of giving a little more attention to the art institutions, creating some new ones and improving the ones that they have."

Indeed, India's public art museums are in dismal shape. There are only a handful of institutions, their permanent collections are small and unimpressive, and the state of curating is dismal. Until its renovation last year, for instance, viewing the permanent collection at New Delhi's National Gallery of Modern Art felt like stumbling on a few paintings in the basement of a college library, and even post-renovation, the ongoing show of the impressive works of sculptor-architect Anish Kapoor is marred by haphazard organization.

"Do they have any independent curators there? No. It's one bureaucrat making all the decisions," said Talwar.

That absence of state-run institutions has raised the stakes for the summit, which has to play a larger role than a typical sales-focused art fair. In a sense, it is emerging from the vacuum as a kind of focal point for the developing art scene, helping to create critical mass for budding domestic galleries and a host of disparate private initiatives aimed at creating institutions whose concerns run deeper than tracking the auction prices at Christie's.

Apart from the 84 galleries that have taken booths at the fair, displaying some 500 artists, most of the New Delhi-based galleries have timed openings to coincide with the summit. On Wednesday night philanthropist Kiran Nadar launched a stunning private museum in the heart of the city's shopping district. And Czech carmaker Skoda will announce the winner of its new prize for contemporary art on Friday evening — as the art summit opens to the public.

Essentially, three years after its rather humble beginning, the Indian Art Summit has created a reason for everybody interested in the future of Indian art to be in India in the same place at the same time.

Since the first Indian Art Summit, in 2008, the number of exhibiting galleries has tripled, the number of visitors is tipped to grow from fewer than 10,000 people to more than 60,000, and the value of works sold at the fair is expected to reach nearly $10 million, compared with less than $2.5 million in its first year.

Moreover, the number of international galleries attending this year — while still modest at only 34 — has doubled since 2010. And even though the bigger names, such as London's Lisson Gallery, are here promoting top Indian artists such as Anish Kapoor, smaller and hungrier international galleries are dipping their toes in the water to see if India's burgeoning art collectors can be tempted to look beyond Indian art. That means that works by Pablo Picasso, Henri Matisse, Salvador Dali and Damien Hirst are on the block, but also a host of lesser known artists from the U.K., Europe and Asia.

"With the Indian GDP booming and the number of Indian millionaires on the rise, a section of the international galleries are interested in exploring the potential of promoting their program to the Indian collector base," said Arvind Vijaymohan, a consultant who advises art buyers. "The Art Summit is the most viable platform in the current context for anyone interested in connecting with Indian collectors."

India's military shopping spree

Analysis: India plans to spend $100 billion to modernize its military. But how likely is success?

By Jason Overdorf
(GlobalPost - January 21, 2011)

NEW DELHI, India — Nearly 30 years after its inception, India's supersonic light combat aircraft was finally cleared for induction into the air force this week — four years behind schedule, $500 million over budget and still propelled by an American-made engine.

Now, New Delhi is getting ready to double-down.

"After the Tejas [aircraft] accomplishes a series of milestones, the country is poised for a major turning point," Defense Minister A.K. Antony said at the test flight ceremony in Bangalore on Monday.

With a whopping $100 billion earmarked for defense purchases this decade, India has its sights set on simultaneously modernizing its moribund military and jumpstarting its own lame duck defense industry.

But there's a long way to go. Shortly before YouTube videos surfaced of a Chinese stealth fighter, India's Defense Research and Development Organization (DRDO) in all seriousness unveiled a domestically designed and developed... airship.

"There's a gap between their ability and their claims," said Anit Mukherjee, a research fellow at the Institute for Defense Studies and Analyses. "They may not be able to do a Fiat, but they claim to be able to build a Ferrari."

Meanwhile, the stakes couldn't be higher. A modern military is essential if India is to take a larger role in Asia and the Indian Ocean — where China is swiftly gaining influence. The DRDO is 40 years behind schedule and $1.6 billion over budget, the defense minister said in May. And its most ambitious and vital projects have by and large been failures.

While that might be embarrassing for India, it's a huge opportunity for U.S. suppliers like Lockheed Martin, Boeing and Northrop Grumman. But Washington will need to cut some of the red tape associated with U.S. arms deals to leverage American industry's cutting-edge defense prowess to reshape U.S.-India relations. And New Delhi will need to defeat the rearguard resistance to private industry posed by the left to transform its domestic defense industry.

"There are three gods in Hinduism: Brahma, the creator; Shiva, the destroyer, and Vishnu, the preserver. You will need all three to reform our aerospace sector," said former Air Vice Marshal Kapil Kak, who now heads a think tank called the Center for Air Power Studies.

The first step will be Shiva's job: destroying — or radically restructuring — the existing system.

India's department of atomic energy has built a nuclear bomb and its space agency has sent a rocket to the Moon. But since 1992, when APJ Abdul Kalam declared that India should aim to make 70 percent of the equipment used by its military by 2005, the DRDO has "invented" radar and sonar systems, combat rifles, an artillery gun and cold weather gear for soldiers posted on the Siachen glacier — all of which it could have bought off the shelf elsewhere (including North Face).

Various ballistic missiles have failed in the testing process. Army personnel say the Arjun tank doesn't shoot straight. And even after it gets a second-generation engine in 2014, again from General Electric, critics say the Tejas — which was jointly produced by the DRDO and state-owned Hindustan Aeronautics Ltd. — will not be able to compete with state-of-the-art fighters.

"DRDO has not produced anything that would change India's strategic condition in any way," said Sunil Dasgupta, a defense expert with the Brookings Institution. "After all, that's the entire point of military research and development."

As a result, India is preparing for a foreign shopping spree. According to a recent study by the consultancy firm KPMG, India is expected to buy $100 billion in foreign weapons by 2022. In the pipeline already are a $10 billion contract for 126 multi-role combat aircraft, a $7.6 billion tender for 12 stealth frigates, a $3.5 billion deal for seven submarines and a $3 billion contract for 197 light helicopters, among other items.

But Indian industry could benefit, too, if New Delhi plays its cards right. If it succeeds in leveraging its planned big-ticket purchases and its attractiveness as a manufacturing center for global suppliers to encourage technology transfers, KPMG argues, India could become one of the world's key sourcing destinations for defense systems and equipment, fueling technology spinoffs for a host of industries.

"If you look very conservatively, over the next 20 years, India will require about 1,200-1,500 aircraft in the civil sector alone," said Kak. "If you take the military aircraft, the military and civilian infrastructure, and you put it all together I see in the next 20 years a market of between $250 and $300 billion."

That's not the only reason the intersection of the commercial and military aerospace industries presents exciting prospects. There's a lesson in history, too. Prior to India's 1991 economic liberalization, the country's automobile sector was in much the same condition as its aerospace industry is today — with only two state-owned manufacturers, both relying on outdated designs to generate a pittance in sales.

Since opening to joint ventures and later direct foreign competition, however, India's car industry has grown more than tenfold in sales and manufacturing capacity — producing nearly 2.5 million cars a year, compared with less than a million in 2003. More than 40 Indian auto parts companies generate $100 million or more in annual revenue — supplying components to virtually every carmaker in the world. And half a dozen of the world's largest auto companies have invested $500 million or more in the past year to make India a global hub for small car manufacturing.

Aerospace could be looking at its own reform-era boom, following the government's decisions to open up the defense industry to domestic private companies and allow limited foreign direct investment in defense in 2001. Already, Mahindra Defence Systems has inked a deal with Seabird. Tata Advanced Systems has formed agreements with Boeing, Israel Aerospace Industries and Sikorsky Aircraft. And Larsen and Toubro has signed pacts with the European Aeronautic Defence and Space Company (EADS), Boeing, Raytheon, the Russian Aircraft Corporation (RAC MiG), Saab Gripen and Lockheed Martin.

"The Indian aerospace industry, both military and civil, stands uniquely poised today, on the threshold of catapulting itself into the global arena," the consultancy PricewaterhouseCoopers wrote in a recent industry report.

But both New Delhi and Washington will have to break existing paradigms for U.S. suppliers to seize the opportunity and bolster the ongoing transformation of U.S.-India relations.

For decades, India has preferred to buy arms from Russian defense companies, due to the erroneous impression that its state-owned firms are less prone to corruption — especially after allegations of kickbacks from Sweden's Bofors brought down Rajiv Gandhi's government in 1989. Moreover, Indian strategists until recently deemed American companies to be unreliable weapons suppliers, following America's gunboat diplomacy in the 1971 war between India and Pakistan, the U.S. decision to equip Pakistan's air force with the F-16 in the 1980s, and the imposition of sanctions in response to India's nuclear tests in 1998.

At the same time, America's private defense firms — in contrast to state-owned rivals — will likely have deep reservations about the demands India is making in return for access to its large and fast-growing weapons market. The terms of the multi-role combat aircraft contract, for instance, require that a massive 50 percent of the total outlay be outsourced back to Indian industry in what is known in the industry as "offsets." And the absence of any significant privately owned Indian defense companies will make meeting that requirement difficult for American firms — which unlike their Russian rivals are reluctant to form joint ventures with state-owned enterprises.

"I don't think Indian officials accept this idea that government can fund research without actually conducting it. There are no startups, no programs whereby people can come together in garages to develop new technology," said Dasgupta, who co-authored "Arming without Aiming: India's Military Modernization," with the Brookings Institute's Stephen P. Cohen. "That is something that needs to happen in order to foment the activity that breeds innovation."

To overcome those obstacles, Washington will need to cut some of the red tape associated with U.S. arms deals and begin to treat India like the "strategic partner" it is meant to be instead of a subordinate ally.

For example, India at first baulked at signing America's boilerplate logistical supply agreement and proliferation security initiative, because some Indian policymakers feared it would force India into toeing the U.S. line on foreign policy.

Meanwhile, New Delhi will need to shake off its fears about private firms in the defense sector — whether related to corruption or sovereignty. At the simplest level, that means opening defense and aerospace further to foreign direct investment and removing the remaining tax incentives and the like that give state-owned firms a cost advantage. But it also means formulating a defense industrialization policy that identifies and prioritizes the technologies and capacities it wants to acquire, and amending the existing offset policies, according to KPMG.

Currently, India doesn't offer its foreign suppliers any offset multipliers — which encourage technology transfer by giving desired technologies a greater offset value than the contract's actual dollar amount. (For example, if India assigned jet engine technologies a multiplier of 7, then choosing a local company to manufacture $100 million in components would earn the foreign firm $700 million in offsets). But most importantly, India will need to re-envision its current narrow definition of privatization — which doesn't allow for government-funded research unless one of its moribund government labs does the work.

"The biggest long-term thing is to create a procedure whereby research can be independent from the state," said Dasgupta. "If that can happen somehow the pace of innovation will get faster."

Copyright 2010 GlobalPost
Source URL - http://www.globalpost.com/dispatch/india/110111/india-military-air-force-tejas

Food crisis threatens India

In a country where cost of onions has toppled two governments, Singh has to act fast.

By Jason Overdorf
(GlobalPost - January 7, 2011)

NEW DELHI, India — Alok Kumar, a 30-year-old father of two, is worried. Though the monthly salary he earns as a chauffeur in New Delhi amounts to about half the sum the average Indian earns in a year, high prices have forced him to stop giving his children their allowance and eliminate essentials from his family's diet.

"We used to live on 3000-4000 rupees a month, and that has gone up to as much as 13000," Kumar said. "At home we don’t even use onion and garlic now. Not at all! That has made the food bland and tasteless. Yes. But what else can we do? We have no way out. We are helpless.”

Kumar is hardly alone. The specter of another food crisis has the whole world nervous. But in India, skyrocketing food prices threaten to send the entire economy into a tailspin, as the government struggles to balance growth and inflation — and create a safety net for the millions still mired in poverty.

Government data revealed on Thursday that India's food inflation topped 18 percent for the week ending Dec. 25, with vegetables prices up more than 50 percent from the same period last year. The steep increase came as a surprise to economists, who had predicted a moderation in prices due to last year's good monsoon.

For India, a spike in food prices means real suffering. But a prolonged and seemingly unstoppable rise in the cost of basic commodities like the one India has witnessed over the past two years could have farther reaching effects.

"If food prices rise, wages go up because workers will demand high wages," said Dharmakirti Joshi, chief economist at Crisil, the Indian arm of Standard & Poor's. "Wages going up make cost of products go up, and manufacturers will try to pass it on to the consumer. It's called a wage-price spiral."

That's grim news for Prime Minister Manmohan Singh's United Progressive Alliance (UPA) government, which has already seen its approval rate plummet. According to a recent India Today/AC-Nielsen poll, the UPA has since August fallen behind the opposition in nearly 20 percent of the parliamentary constituencies it won in 2009. In a country where economists track inflation every week, instead of every month, and the cost of onions has brought down two governments, that means Singh has to act fast. The trouble is, there may not be anything he can do.

“We are not sure whether we have all the tools in our hands to control food inflation,” former Finance Minister P. Chidambaram, who is now the home minister, said earlier this week.

Since coming to power for its first term in 2004, the UPA has sought in vain for "inclusive growth" that will bring the rural poor out of poverty as rapidly as it creates wealth for the elite and middle class. The stopgap answer has been social welfare programs like the Mahatma Gandhi National Rural Employment Guarantee Scheme (NREGS), which ensures that rural laborers get 100 days of work per year. But economists argue that the NREGS has only driven up prices, especially for items like milk, eggs and vegetables, as the poor begin to buy better food and change the ratio of demand to supply.

Now, to avert a crisis, the government has no choice but to increase the wages paid under the scheme, even while the central bank tightens monetary policy to rein in inflation. Essentially, India's politicians are driving up demand at the same time that its fiscal authorities seek to curb it. Thus, the same day that the gaudy inflation numbers came out, Rural Development Minister C.P. Joshi announced wage increases of 17-30 percent for NREGS workers, and economists pushed the Reserve Bank of India (RBI) to add another hike to the 150 basis points it has boosted its benchmark lending rate since mid-March.

The bottom line: India will have to sacrifice growth to stave off inflation. But tightening money supply to slow demand for fuel and concrete may not be enough to avert a food crisis.

"It's going to be a very difficult balancing act for the government to maintain growth expectations over 8.5 to 9 percent," said Shubhata Rao, chief economist at Yes Bank. "Some growth will have to be compromised in its focus toward inflation management."

Complicating matters, the very reason that India was able to weather the global financial crisis may make it more vulnerable to the food crisis.

India's economic growth is driven by domestic demand — not exports — so India didn't blink when the United States hit the skids. But that same domestic demand, fueled by the rising incomes of the middle class and government spending on the poor, has put new pressure on the supply of oil, steel, cement and everything else. And the meltdown elsewhere has pushed hot money into India, further feeding the fire.

In agriculture especially, economists say, supply has not kept up with demand.

The core problems are poor supply chain management, stagnating investment and diminishing returns from the green revolution's prescription of chemical fertilizers, pesticides and heavy irrigation. But some agriculturalists argue that these issues are exacerbated by the current attempts to solve them — by dismantling government-regulated pricing, creating a commodities futures market and encouraging industrialized agriculture. Thus, while pro-market and anti-industry experts alike blame middlemen for exaggerating the price rise by hoarding items like onions, there are deep divides over what action should be taken.

On one hand, market reformers argue that big retail — and foreign players like Walmart — must be allowed a freer hand in Indian agriculture to encourage investment and streamline the supply chain. On the other, left leaning farmer advocates say that the government's "market mantra" and politicians' dependence on traders for campaign financing has prevented timely and efficient moves to curb profiteering.

"The country does not face a constraint on the supply front," said Devinder Sharma, a farm policy analyst. "If it is happening it is because the middleman is making a killing."

Whoever is to blame, no country fears skyrocketing food prices more than India, where some two-thirds of the billion-plus population lives hand to mouth.

“We are barely managing because of the price rise," said Jai Chand, a 32-year-old security guard. "My children have become thin because we can’t give them enough milk. We eat vegetables once a day and sometimes not even that."

Copyright 2010 GlobalPost – International News
Source URL - http://www.globalpost.com/dispatch/india/110106/food-security-crisis-economy

Industrial espionage booming in corporate India

Insiders say government phone taps are just the tip of the iceberg.

By Jason Overdorf
(GlobalPost - January 2, 2011)

NEW DELHI, India — For the past month, Indian business leaders have watched in horror as a series of tapped telephone conversations between a powerful lobbyist and top industrialists have surfaced in the press.

But local security experts say the revelations associated with the alleged 2G telecom scam are just the tip of the iceberg when it comes to vulnerable company secrets. In India's fast-growing economy, they say, no industry is booming bigger than corporate espionage.

"If you look at all the companies doing business in the electronic sector in India, the chances are that four out of 10 would invariably have faced or are facing such issues," said Pavan Duggal, a supreme court lawyer who specializes in cyber law. "The reality is that these thefts of intellectual property rights and confidential data are hitting the corporate world in a big way."

Cut-throat competition provides ample motive, as companies battle to carve out brand positions, retain top talent and develop new products. A lax legal environment allows spies to operate with relative impunity. And a boom in white collar jobs means that employees shift jobs every few months — making it all too easy for companies to plant a mole in competing operations, and all too tempting for job-jumpers to walk away with sensitive information or protected intellectual property.

"The perpetrators of unauthorized access of corporate data do it with impunity, knowing full well that the law is deficient and that it will take a long time for them to be prosecuted," said Duggal.

According to a recent survey conducted by the consultancy firm KPMG, 14 percent of Indian companies have been victims of corporate spying, while another 39 percent fell prey to intellectual property theft and computer-related fraud — and business-sensitive information and user IDs/passwords were the principal targets.

The potential losses from this kind of spying are difficult to calculate — since nobody knows what effect a stolen ad campaign might have had, or how a stolen design might have dominated the market. But there's no doubt that big money is at stake. Early this year, for instance, India's Thermax agreed to pay Pennsylvania-based Purolite International $38 million to settle a lawsuit over the alleged theft of proprietary water purification technology.

"You may not use [your competitor's] research work," said Kunwar Vikram Singh, president of the Indian Council of Corporate Investigators. "But suppose you have already developed your own brilliant idea. Even to launch that brilliant idea in the shape of a product you must know the market."

The spies aren't always after new technology. The targeted information ranges from client lists to proprietary software to advertising strategies, says Singh.

Not long ago, for instance, a company was readying a new ad blitz when, on the day before the launch, executives saw their planned slogan all over the city on their morning commute — on billboards advertising one of their competitors.

In another case, one of the country's foremost motorcycle and scooter manufacturers lost the design and specifications for an upcoming model to a competitor through a spy planted with the contractor that was running the company cafeteria.

"They planted a guy ... who knew a little about IT and could become friendly with people, and then when the office was closed he would access employees' computers and get the information out," said Ravi Kapur of ACE Detectives, the private investigator hired to plug the leak.

Part of the problem is that Indian laws governing these areas are weak and ambiguous. India has no specific data protection law, so the theft of sensitive information like marketing strategies or employee salaries — which is not governed by intellectual property laws — throws up a host of legal questions.

And while the unauthorized downloading or copying of computer files is illegal, the civil and criminal penalties are minor compared with the sums at stake for corporations. A criminal booked for data theft under the Information Technology Act, for instance, faces a maximum three-year term in prison and a maximum fine of around $10,000, and the most a victim can seek in civil damage is about $1 million — which the Thermax-Purolite settlement reveals as a pittance.

"It's extremely lax," said Kapur. "People don't generally get caught. Then, even if this guy gets caught, they're not after this guy [who took the information] — they're after the competitors. Now, to ensure that the whole chain gets into the loop is not the easiest of tasks."

Private investigators have been the biggest beneficiaries, as the budding industry profits from both sides of the information war. While none of the detective agencies interviewed would admit to conducting actual corporate espionage, firms that perform similar work — such as planting spies for clients within labor unions — say that they get requests to steal competitive information on a daily basis.

Moreover, there's almost as much money to be made in protecting firms from spies as there is from spying on them, not only through investigating leaks, but also in risk analysis, security systems design and — since it's the enemy inside that's most feared — employee background checks.

And that means going to work for an outsourcing company is starting to seem like applying to the Pentagon.

"Before, people were reluctant to snoop around," said Singh. "Now, they go deep."

Copyright 2010 GlobalPost – International News
Source URL - http://www.globalpost.com/dispatch/india/101223/industrial-espionage-corporate-india