2G, tax row start to put strain on diplomatic ties

[harpoon]

NEW DELHI: The 2G telecom crisis is not just a story of corruption in India's showpiece infrastructure sector. Neither is the Vodafone issue. As these crises drag on, they are beginning to have a diplomatic fallout on India's relations with these nations with implications ranging from the minor to the significant.

With the high pitch over the Indian children in Norway now a thing of the past, its time for India to face the heat from the other direction. Telenor, which is also caught in the toils of the 2G scam, is more than a telecom company. The Norway government's pension fund, which is the world's largest sovereign fund, and provides pensions to all Norwegians is deeply invested in Telenor. If Telenor is forced to exit India under a cloud, the effect on bilateral ties can only be imagined. This is no longer a telecom problem, its fast becoming a diplomatic one.

Sheikh Abdullah bin Zayed Al Nahyan, foreign minister of the United Arab Emirates is a worried man and his frequent interactions with the Indian leadership is proof of that. The 2G crisis has put Etisalat on the mat, and as investigations and case against them continue, it might begin to impact bilateral ties. The UAE is India's largest trading partner, with over 1.75 million Indians living and working there. Although India is increasing its oil offtake from the UAE, taking business away from Iran to the UAE, the India-UAE relationship could end up bruised. For an Indian government hoping to attract billions of dollars in investment from their sovereign wealth fund, the prospect of worsening bilateral ties is a nightmare waiting to happen.

Foreign office mandarins are now expected to practise economic diplomacy with their interlocutors. But, sources said, this will become progressively difficult because India's economic decisions are being taken without keeping foreign policy goals in mind. But the foreign office, which is the first point of contact between these countries and India, doesn't have a seat at the high table. The MEA, or the foreign policy angle, rarely gets a hearing. In the numerous GOMs created to solve economic policy problems, the foreign ministry is not represented in anything more than the ones on Nalanda university and perhaps the UID system.

Russia's Sistema, also embroiled in the 2G mess, is owned by one of the closest friends of Russian president Vladimir Putin. Vladimir Yevtushenkov enjoys special privileges as a Putin crony, and the telecom fallout is bound to have diplomatic implications. Although you may not hear about it in public, these issues are now the stock content of bilateral interactions between India and these countries.

India's Vodafone decision will definitely have an impact on ties with the UK, no matter how government officials gloss over the matter. This week, Vodafone featured in the UPA's white paper on black money, which has also drawn instant fire.

Indian diplomats are as helpless as the officials they confront on the other side of the table and the best they can do is to lend a sympathetic ear. In the rest of the government, these issues are being treated as sector-specific, but only foreign office mandarins can see the growing stain. They will be the ones called upon to clear the mess, but most of the time, their concerns are barely heard by other parts of the government.

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Thank you UPA in general and Raja in particular for messing up our diplomatic relations with 4 of the most important countries in the world.

 

[pt1982]

2G is a valid concern. I mean the SC ruling is a debacle. My personal opinion is that judiciary has no role to play in policy matters which especially related to increase FDI. If the govt. faults in policy they are booted out by people, but striking down the policy if the FDI slows down how the Judges will be accountable?

Regarding, Voda, I have no sympathy. They were using India as the Tax heaven by hiding behind procedure. They have to pay the tax on the property they own here if they have not paid tax elsewhere. Those who supports Voda, one question. Why this kind of brotherly love was not demonstrated in the previous cases of retrospective tax amendments.

Vod is using Corporate bodies to build pressure to wriggle out of the mess thinking that the govt will give in.

 

[Zeeshan360]

Supreme Court should stay away from the financial matters of the country
First Raja made the mistake and then SC cancelled the licenses ..
Cancelling the licenses is just so dumb and ridiculous

If judges have some brain in their heads then they should just look around .. If U have to open a small shop in India U have to pour in thousands of rupees on the government babus just to hasten the form filling process ..

Instead of cancelling licenses , the so called high IQ judges should help government in increasing the efficiency

About Vodafone , I support the strong stand taken by government .. Vodafone was using India as a tax haven and making use of the loopholes in our system similar to what A Raja , Ramalinga Raju did .. All are the same

MTS aka Sistema was involved in massive scam of USB internet sticks sold in Mumbai and Maharashtra region ... They manipulated the number of subscribers and sold the USB sticks with same number to multiple people

 

[Kinetic]

Vodafone was taking advantage of GoI stupidity. Now GoI took the necessary decision which is in favor of India and stand with country's law.

We show middle finger to such 'diplomatic ties' which against the law of the country and betterment of people. If Vodafone want, it can quit, if they want to stay, they have to obey the rules.