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Sanctions get 'saffron' whitewash!

A Special Correspondent

Confusion and fear. That seems to be the market mood after the United States slapped sanctions against India for conducting nuclear tests this week.

But the Bharatiya Janata Party-led coalition government at the Centre is confident that the sanctions will have little impact on the Indian economy.

As sceptics wonder how the Atal Bihari Vajpayee government has come to such a conclusion when the United States itself has still not spelt out what kind of sanctions would be applied against India, the Centre seems to be going hammer and tongs. To dispel fears. To present a rosy -- some may call it a jingoistic -- picture. Does not matter if gallons of political whitewash goes down the drain!

The government claims that, though the US has been fretting and fuming, an eight-member US agriculture department delegation called on Minister of State for Agriculture Som Pal in New Delhi on Thursday and ''discussed ongoing bilateral co-operation in agricultural research, plant protection and health''.

The delegation, led by Dr I S I Siddiqui, deputy assistant secretary of marketing and regulatory programmes, also met the Indian Council of Agricultural Research officials, led by its Director General Dr R S Paroda. Discussions were held with ''particular reference to plant protection and biotechnology''.

And, to further bolster its argument that investor confidence has not been shaken, the ministry of mines yesterday granted a prospecting licence to the US-based Phelps Dodge, one of the largest global copper exploration firm. The company now has the permission to prospect ''copper and associated minerals in Bihar''. The company has also been given permission to set up a 100 per cent subsidiary in India for exploration, mining, refining and smelting of metals.

And, while managers at multinational power corporations like Enron, which is setting up a power plant at Dabhol in Maharashtra, are not sure about the impact of the sanctions, the government has claimed that three international power companies from the US, Australia and China have been knocking at its doors to set up projects in India.

According to Union Power Minister P R Kumaramangalam, top executives of US-based Southern Electric Corporation, China Power Investment Corporation and Australia's Broken Hill Properties met him, expressing their keenness to set up projects in the country.

The companies seem to have taken the initiative despite the looming clouds of international sanctions! They also seem to have assured the government that they would make alternative arrangements if sanctions threaten to exhaust their creditors.

''The SEC will now implement the 10,000 MW power project at Hirma in Orissa, the CPIC proposes to set up power plants in collaboration with the National Thermal Power Corporation and the BHP will set up a 2000 MW power project.''

The fact that the countries of these companies's origin have been strident in their criticism of the nuclear tests -- and Australia and the US have already imposed sanctions against India -- does not seem to matter. Or, is it what adds strength to the BJP claims that the country will not be affected by the sanctions?