The India Cables

A conversation with Prakash Karat

While reassuring the United States government of “friendly intentions and a desire for good U.S.-India relations,” Prakash Karat, general secretary of the Communist Party of India (Marxist), made it clear to a senior American diplomat in mid-2005 that his party would oppose the U.S. on “a number of issues that matter to the USG such as some FDI, privatization, missile defense and military to military relations.”

In his first meeting with U.S. Embassy officials after his election as general secretary in April 2005, Mr. Karat welcomed closer ties between the United States and India, and FDI on a case-by-case basis, stressing that it must benefit the country.

‘Talented and skillful’

Overall, the meeting between Mr. Karat and Charge d'Affaires Robert O. Blake, Jr. and the Political Officer of the U.S. Embassy in New Delhi, on May 4, 2005 went very well. The Embassy, in a cable to Washington the same day ( >31968: confidential ), described Mr. Karat as a “talented and skillful leader who is well-aware of his political importance.” The CPI (M) leader, the Charge reported, could walk a fine line and draw subtle distinctions in policy. “Relatively young [at 57], he will be a powerful figure on the Indian political scene for years to come, and could play an increasingly important role in the formation of future Indian governments.”

The cable, sent under the name of Mr. Blake, has been accessed by The Hindu through WikiLeaks.

Mr. Karat told Mr. Blake that the CPI (M) had no problems with stronger economic ties between the U.S. and India, and that the party found increasing trade, especially in the Information Technology sector, promising. “On the whole, he emphasized, his party favors improved bilateral relations, but wants India to maintain its ‘independence' and has ‘reservations' on several issues, noting that the CPI (M) objects to the proposed US provision of a National Missile Defense (NMD) system to India. The party wants closer ties with Pakistan and does not want to encourage an India-Pakistan arms race.”

On the NMD, the Charge responded that the U.S. proposal was only for a “limited missile defense system that would be a stabilizing influence.” Likewise, the U.S. was interested in supplying combat aircraft to India, “as this will meet an existing need, and the prospect for India-US co-production will benefit the Indian economy.”

On FDI, a subject of considerable importance for the U.S., which figured prominently in the discussions, the cable reported Mr. Karat as saying it should be cleared on a case-by-case basis. His view was that the requirements must be prioritised to ensure that the FDI benefited the country through employment creation and technology transfer. On retail trade, the CPI (M) was apprehensive that opening this sector to foreign companies would displace labour in the small trading sector and put Indian shopkeepers out of business.

The cable recorded in detail the conversation on this issue: “To demonstrate CPI (M) commitment to case-by-case examination of FDI proposals, Karat noted that his party had no objection to increasing FDI in civil aviation, which benefits the country. The party wants to ensure that the GOI [Government of India] gives preference to domestic capital over foreign investment in certain areas. ‘We want India to build on its strengths, and have no phobia against foreigners, like the swadeshi wing of the BJP,' he stated.”

Mr. Blake's response to this was predictable. Holding up China as an example before the Marxist leader, he claimed that research had documented that opening China to retail trade benefited its economy. Chinese suppliers to Walmart, he noted, created more jobs than were lost. “India would benefit even more, as it has a strong private sector and the expansion of markets would more than make up for job displacement.”

The Charge took the opportunity to pitch for a liberalised banking sector, saying it would “introduce long-term banking methods that don't currently exist in India and provide financing for much-needed infrastructure projects.”

On telecom

Mr. Karat saw no reason to raise FDI in the telecommunications sector as India already had private companies in competition with a viable public sector entity and providing good service. “Raising the cap to 74 percent as Congress proposed ‘would eradicate Indian companies,' Karat maintained, and in any case the communication sector should not be completely foreign-owned for security reasons.”

The confidential cable reported that the general secretary of the CPI (M), which was supporting the ruling United Progressive Alliance at the Centre from the outside, was well aware of his party's limitations in this context: “Karat joked that the CPI (M) has little leverage on these investment issues, as the GOI can make many investment decisions without parliamentary approval. Insurance is an exception, and there the party could use its clout to oppose proposals to increase FDI from 26 to 49 percent.”

As for domestic politics, the cable sent by the New Delhi Embassy to the State Department reported Mr. Karat as emphasising that “the Communists wanted to play a responsible role in governing India and avoid confrontation and harsh rhetoric” but were determined to oppose policies that clashed with their ideology.

Interestingly, Mr. Karat emphasised that the Left was “the UPA's strongest guarantee of stability…as the Communists do not want this government to fall and it will not do so unless Congress does a poor job of managing the coalition.” Further, “Karat was confident that the CPI (M) would expand its influence, but had no illusions that it could form a Third Front capable of taking power in New Delhi any time soon… There have been three such ‘experiments' so far in India, with little success. The CPI (M) is cautious and wants to create a stable coalition, not just an ad hoc alliance. To be successful, there must be a common policy plank to which all the parties must agree, he stated.”

‘Wary of grand visions’

Asked whether the Communists had a vision for India, Mr. Karat replied that they were “wary of grand visions.” However, the Left parties wanted to implement land reform throughout the country, which would be nothing less than an agrarian revolution.

“He asserted that many of India's development problems stem from its failure to enact land reform, leading to unequal agrarian relations and skewed rural development. Karat defined land reform as the strict enforcement of land ceilings and the distribution of land to the landless.”

The Marxist leader noted that land reform was the strength of the CPI (M) in West Bengal, “where it increased agricultural production, made the state into India's largest rice producer, and demonstrated that small farms can be productive.” He cited Kerala as an example of the progress an Indian State can make when land reform was coupled with investments and inputs. He contrasted the State's performance with that of Uttar Pradesh, which had one of “India's most corrupt bureaucracies” and where all policies were hampered by the caste factor.

The Charge pointed out that developing countries benefited from investment in basic health and primary and secondary education and that USAID (United States Agency for International Development) had large health programmes in India. “Karat agreed, noting that the Communists were pushing the GOI to increase spending in both sectors, especially in the rural areas.”

According to the cable, the discussion ended with Mr. Blake — who was to become the U.S. Ambassador to Sri Lanka in September 2006 — expressing the hope that “the Embassy and the CPI (M) could maintain regular contact and discuss the issue” and Mr. Karat welcoming the chance to open a dialogue with the United States government and discuss issues face-to-face and promising to hold more such meetings on a regular basis.

The meeting took place at the CPI (M) headquarters in New Delhi.

( This article is a part of the series "The India Cables" based on the US diplomatic cables accessed by The Hindu via Wikileaks.)

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