Reform is no longer the biggest obstacle to India’s economic-diplomatic ambitions

A few weeks ago, Chief Justice of the Supreme Court of India N.V. Ramana in London that India could become a preferred destination for global investment due to the independence of the judiciary and the rule of law. Just a few days later, that theory was put to the test in the restive state of Uttar Pradesh: There, in the capital, Lucknow, a sprawling mall built by the famous Indian Muslim businessman Yusuf Ali, was flooded. attacks by Hindu nationalists.

Lulu Ali Group – which has built a significant footprint in the Middle East over the past few decades – has brought in massive investments of over $250 million and up to 15,000 jobs through its new mall in Lucknow. However, shortly after the mall was opened by Prime Minister Yogi Adityanath, Hindu nationalist groups claimed That 70 percent of the employees are Muslims.

When the center’s management refuted the charge, a video emerged showing a handful of people performing Muslim prayers in a corner of the mall. Hindu nationalists soon retaliated by chanting Hindu chants in response.

It wasn’t just Hindu nationalists who wanted a slice of the debate. Last week, Muslim leader Azam Khan of the opposition Samajwadi Party claimed Yusuf Ali is a fundraiser for Hindu nationalist Rashtriya Swayamsevak Sangh (RSS) – widely seen as the ideological wellspring of the ruling Bharatiya Janata Party. Khan also said that Ali “wanted to stir up sectarian violence in the country”.

The series of controversies – all taking place in less than a month since the mall opened – have starkly highlighted the significant long-term challenge facing India’s efforts to become a global investment destination.

Are you enjoying this article? Click here to sign up for full access. Only $5 a month.

In the past fiscal year, India benefited from a record high inflow of foreign direct investment – nearly $80 billion. Prime Minister Narendra Modi’s government has attributed this to its “liberal and open” policy of foreign direct investment. However, recently, a rapidly weakening rupee, war-fueled inflation in Ukraine, and rising interest rates in the West could prevent further inflows. So far this year, foreign investors have withdrawn nearly $30 billion from Indian stocks – also a record.

Societal tensions are not lost on global investors and companies either. Earlier this year, global tech firms based in Bengaluru – long known as India’s Silicon Valley – were reported to be looking to switch to the neighboring state of Tamil Nadu after bearing the brunt of rising communal conflict. Karnataka – and its capital, Bengaluru – is ruled by the BJP and has seen a series of clashes and disagreements in recent months.

Early this year, the Karnataka state government introduced the so-called Anti-Conversion Act to prevent forced religious conversion. In the lead up to its passage, scores of Christians and churches were attacked by Hindu nationalist vandals. Meanwhile, in some government colleges, Muslim women were prohibited from attending classes while wearing the hijab. This move was followed by further clashes between Hindu and Muslim students. Muslim meat sellers were also targeted after the BJP leader demanded that halal meat be banned.

Even the deteriorating social climate in Karnataka forced the big industrialists to speak out. In a tweet, Kiran Mazumdar Shaw, founder of biotech company Biocon, said, resume Prime Minister Pasavraj Bhumi “No [to] allowing such collective exclusion.”

Modi has always expressed his ambition to turn India into a global investment hotspot, and none of this is helpful for this cause. The rapid marginalization and exclusion of India’s 200 million Muslims will greatly reduce the country’s economic potential, and frequent societal clashes will deter global companies from committing to long-term investments.

In 2021, more than 160,000 Indians renounced their citizenship worldwide – the highest number recorded in the past five years. In fact, that number has grown steadily in the previous five years – only hampered in 2020 by the pandemic. This year, about 8,000 millionaires are expected to leave India – putting it third on the list of countries that lost the rich, after Russia and China, according to global migration consultancy Henley and Partners.

Politically speaking, there are few encouraging signs that any of this will change. This year, the BJP’s last remaining Muslim lawmaker resigned, leaving the BJP without a single Muslim among the 395 members of Parliament.

But if India is to successfully become a global investment destination, Modi will need to send a signal to the world that he is building a more harmonious and inclusive democracy.

Related Posts

Leave a Reply

Your email address will not be published.