5 Reasons India’s new BJP (“Tea Party”) Government may not be so Great for Business

(By Juan Cole)

The victory of the Bharatiya Janata Party (BJP) in India’s elections is being hailed in some Western media as a hopeful sign for US-Indian trade and for Indian business. But like the US Tea Party movement, it is rent by internal contradictions that could derail such aspirations. The BJP has many resemblances to the American Tea Party movement. It is xenophobic (especially disliking Muslims). It is imbued by religious fundamentalism and often anti-science. It is hawkish in foreign policy. It is an advocate for the business classes and critical of government programs. Despite the latter position, it may not be as good for the Indian business sector as many observers assume.

1. The Hindu Nationalism of the BJP is exclusivist and intolerant. Contemporary business requires a tolerant and cosmopolitan atmosphere. You want to maximize customers. American Tea Partiers hated Coca Cola’s Superbowl ad this year which showed “America the Beautiful” sung in Spanish as well as English. But Coca Cola walked off with more Latino customers. The Hindu Nationalists have conducted pogroms against Muslims (12 percent of the population) on several occasions, as well as against other religious minorities. What kind of business atmosphere is that creating– whether for investors or consumers? The new Prime Minister, Narendra Modi, himself has been on a US travel ban because as governor of Gujerat State he was felt to have done too little to halt one such pogrom. Sociologists of India have already found that when they sent in resumes applying for advertised jobs with Muslim names on them the turn-down rate was much higher than for those with Hindu names. This sort of discrimination is likely to get worse now.

2. Contemporary business success requires investment in science. The BJP is militantly against scientific findings that contradict its fundamentalist orthodoxies. It supports an indigenous form of homeopathic medicine over scientific medicine. Although it talks a good game about scientific innovation, it makes no pledges of increased government investment in real science and technology, which India desperately needs. Its energy policy is favorable to renewables, but is really more an “all of the above” approach that is not good for fighting global warming. Its attitude will stultify critical thought of a sort on which robust science depends. It maintains that Sanskrit developed in India rather than spreading into it from the north. It opposes the academic study of religion and its findings. Already, the books of Chicago Sanskritologist Wendy Doniger have been banned in India, and this sort of thing will now get worse.

3. Economic prosperity is hurt by concentration of wealth at the top of society. Because of the Congress Party’s redistributive policies, India is a much less unequal society than the US, and over 100 million people have been lifted out of poverty in the past decade. The BJP favors Neoliberal policies that will privatize institutions and favor market mechanisms. But these policies have resulted in vastly increased inequality wherever they have been implemented, hurting working and middle class purchasing power and creating a rootless business class that often turns abroad for investment and profits, abandoning the home country to stagnation and inequality.

4. Economic prosperity benefits from peace. The US economic crises of 1975-82 and 2008-present had a great deal to do with wars (Vietnam & Iraq). The last time the BJP was in power, it almost went to war with Muslim-majority Pakistan, coming close twice in 2002 alone. Since India and Pakistan are both nuclear states, such a war would have been a catastrophe of cosmic proportions. Although the current leadership of the party is less hawkish in foreign affairs and more focused on the domestic economy, it remains to be seen if the rank and file of angry Hindu fundamentalists can pressure the government to take a hard line with Islamabad.

5. Contrary to what many pundits assume, it is not clear that a fundamentalist nationalist party such as the BJP will be very welcoming to foreign capital. Because of its nationalism and ties to Indian small businessmen, the BJP is unlikely to substantially increase foreign investment, especially in the retail sector, where its leaders are talking about retaining relatively strict rules for foreign direct investment.

Many outsiders are celebrating the BJP victory because they assume that it will lead to better trade and economic relations between India and e.g. the US. They don’t seem to realize that India has just elected the equivalent of a Sarah Palin or Ted Cruz. It seems to me that the only question is whether the party, now that it is in power, will become more pragmatic and less intolerant just in order to rule. One dark cloud on that horizon is that it attained an absolute majority in parliament and so does not need more moderate coalition partners.

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Related video:

Euronews: “Congress routed in Indian election as opposition BJP prepares to take office”

17 Responses

  1. #1: That doesn’t seem to have mattered because districts that were majority Muslim and Christian overwhelmingly went for BJP. People want a change and the Congress party wasn’t doing it.

    #4: There were war fears but remember, Pakistan instigated most of it. Contrary to popular belief India doesn’t really care much about Pakistan except in terms of security issues. There aren’t any real designs to conquer the country or whatever.

    #5: Actually Pakistan has hinted that they have no problems with BJP being in power. Mostly because they know where the party stands on issue when compared to Congress. Also that Modi is probably less to talk one thing and do another. Many foreign leaders may not have liked George W or his policies but they knew he wasn’t playing games with them.

    • comments from angry people of various sorts have been with me since I started blogging. At first they were angry I said al-Qaeda was a lunatic fringe, not characteristic of Muslims. Then they were angry I said Iraq War was a disaster. Recently racists angry about being called racists. Life on the internet.

  2. India hardly needs policies even more corporation-friendly than those of the last twenty years. The points Juan has made make India sound just like the USA has become, and for the 800million poor people,those without land (given to transnationals to “develop”) and the forest-dwellers (“Maoists”-internal security threat) life will be even worse. Check out Arundhati Roy’s latest book or any article by Vijay Prashad.

  3. Modi is India’s Ariel Sharon moment.

    Sharon allowed the killing of Palestinians, and Modi allowed the killing of Muslims. Sharon signaled the decline of Israel as a liberal state, and Modi will do the same for India.

    The three countries with repressed ethno-traditions….Israel (Jews), India (Hindus) and China (Han Chinese) will make the world a miserable place for Western liberal traditions.

    This is what the decline of the West and the rise of Asia really means.

  4. It seems very likely that Modi will take a more aggressive stance against tribal groups that have been resisting land seizures and resource extraction. I hope you give those groups, and the Maoist insurgency linked to them, more air time now. Arundhati Roy’s efforts on their behalf need support.

  5. This post by making the comparison to Tea Party seems to miss the obvious. That is, the Tea Party only won primaries :)

    I was disappointed to note that Prof Cole did not get beyond the typical perceptions handed out to westerners by Indian informants in the US. The same’s the case with western journalists like bureau chiefs in India who tend to stay in New Delhi and take their soundings from blue blooded Indians who are loath to get out of their palatial mansions in Delhi. This is a bit like American journalists reporting on Vietnam while sitting in the bar of the Hotel Continental in Saigon. Of course, Harrison E Salisbury went to N Vietnam. But there are no Salisbury’s in New Delhi. Besides the Indian hinterland is hardly a war zone so it’s inexplicable why the journalists dont make the trip. Perhaps it’s the same reason why undergrads dont go the library – intellectual and physical laziness.

    There are couple strange things about the elections this time round. Modi seems to have talked ‘development’, not Hindu-Muslim stuff. Secondly, Muslims in the heartland seem to have voted for him in large numbers.

    It’s true that Modi is sympathetic to big business . But he would also be equally unsympathetic to things which are bad for business such wars, chaos, internal strife. Prof Varshney of Brown University and formerly of the U of M , in his regular column in the Indian Express, notes several concessions to Muslims in his election manifesto such as Urdu, which were hitherto unthinkable in the BJP manifesto. Modi on the campaign trail remained silent on Hindu agenda such as the Ram Temple and related themes which had the chance of being considered even by his Hindu supporters as flogging a dead horse. Overall Prof Varshney gives a rather nuanced view of what’s gone on in the campaign trail this time and why Modi won. For those who do not know Prof Varshney, I’d recommend his 2002 book on Hindu Muslim strife in India which is completely based on data culled on many decades of Hindu Muslim riots. He’s no apologist for anybody.

  6. Dear Mr Cole, I’m an Indian-American who is a naturalized US citizen who spent a significant amount of time in India and for a decade in US. This information is relevant because it gives me credentials to talk about both countries in a reasonably competent manner.
    I do not know what your background, experience and credentials are as just I happened to find this article among my newsfeeds. So my apologies if I do come armed with no presumption about you.
    While you’ve written a literally coherent article – it is factually incorrect. You seem to have drawn conclusions on scant to no evidence and have made sweepingly general comments. Just for starters – I would like to know just one pogrom which BJP has conducted as your article seem to be implying. You have cleverly tried to establish causality between Hindu Nationalism, BJP and pogroms against muslims – assuming for a moment if we can call them pogroms. While Hindu’s and Muslims have clashed on multiple occasions, there are many Hindu Nationalist parties with BJP being one of them and sitting on the other end of the globe without putting much effort into research – it is very difficult to see the wheat from the chaff. The problem is if you can not separate the wheat from the chaff then you should not be in a business of writing articles like these.
    Coming to your 5 reasons, here is what you should add –
    #1: I think simply this article takes care of that reason.
    #2: The amount of scientific investments made during previous BJP rule during 1999-2004 were probably more than all other govts put together in last 25 years. It’s a motherhood statement but if you prefer I can go into details on and on – I guess a simple research on growth of India’s Bio-tech industry, investments in infrastructure (such as power, roads, ports) and anciliary units and education will be enough. By the way – ancient Hindu texts talk about Ayurvedas (and not Homeopathy which is a German invention I think).
    #3: Really? So if US had been a much better place if it had become socialist like USSR and India should’ve continued with that to be successful in say 1000 years?
    #4: This is probably the most irresponsible comment on your behalf. You can claim that India almost went to war with Pakistan without providing any context and get away with it but it simply shows how misguided your article is.
    #5: I’d request you to again go back and do some more research on the 5 years of previous BJP Government and the amount of business friendly policies adopted by them. If you think Indian corporates are naive in their massive support for BJP then you must be a visionary business leader whom I have never heard of.

      • Thank you for providing that link as it provides another perspective as to why India-Pakistan are not going to war. In the very first paragraph the journalist noted that the two sides at border radio each other before they fire (or at least advise other of the presence of civilians and such). It is because there is a lot of rhetoric in India-Pakistan relationship. The 2002 attack from Pak terrorist was real but the Indian response was clearly a pressure tactic to make Pakistan act on it and assuage the Indian populace’s anger. It is not that the Indian Govt led by BJP was belligerent and wanted to have war as you had portrayed in your article.

        • I am afraid you don’t read texts very well. The BJP government was belligerent and willing to go to war, as the article’s headline said, despite the danger of nuclear weapons exchange. There is no evidence that the Musharraf government itself was behind the attack on the parliament building.

  7. Forget it this butcher has killed so many muslims in India and he wants extreme Hinduism in India so another Races can’t worship their own religion. Modi is nothing but a butcher of Gujarat he killed people over there he will do it again,

    • It hasn’t been proven he was directly behind the killings, though Human Rights Watch has suggested it.

  8. #1 Narendra Modi was very good for business in Gujarat, the state he presided over for over a decade. His campaign was wholly about jobs and development, and Indian voters believed him.

    2. Doniger’s publisher, Penguin, withdrew her book, faced with a private lawsuit. The book is not banned. As to science, the Vajpayee government (BJP) was an enthusiastic supporter of Indian science establishments. Congress’s Manmohan Singh always seemed skeptical of Indian capabilities and seemed more inclined toward import rather than indigenous development of technology. It remains to be seen how Modi will do.

    3. Modi’s state of Gujarat actually has the third lowest Gini coefficient of the states in India, and the Gini coefficient improved a wee bit (i.e., more equality) during his tenure as Chief Minister.

    4. The correct way to put it is that Pakistan-backed terrorists attached the Indian Parliament, and army encampments in Jammu & Kashmir. That almost led to war.

    5. India’s real GDP growth rate per the UN
    link to un.org

    Year – India – Developing countries average
    2000 – 4.0% – 5.8%
    2001 – 5.2% – 3.0%
    2002 – 3.8% – 4.3%
    2003 – 8.4% – 5.3%
    2004 – 8.3% – 7.3%
    2005 – 9.3% – 6.7%
    2006 – 9.7% – 7.3%
    2007 – 9.1% – 7.6%
    2008 – 7.3% – 5.4%
    2009 – 5.9% – 1.9% (partly estimated)
    2010 – 6.5% – 5.3%

    The war scare in 2002 did not dampen growth in 2003, it would appear.

    • Oh come on. Penguin voluntarily removed a book from the Indian market? That’s your story? They knew Hindutva judges would rule against them. BJP infiltrates RSS types into the bureaucracy as a way of remaining in power even when they aren’t. We are likely headed toward the end of freedom of speech in India as regards archeology, linguistics and history– which you cannot separate out from science.

      Why would BJP risk nuclear war twice in 2002 over a terrorist attack (not the attack of a state) if they were sane people? If you don’t think that affected foreign investment for a while, you didn’t live through it.

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