The general feeling in the Indian corporate sector is that the US action was uncalled for at a time when the world opinion was turning in favour of India. Says F I C C I secretary-general and economist Dr Amit Mitra: "It is an overreaction on part of the US. This is disappointing for the Indian economy as the process to lift the sanctions has already started."
Interestingly, the US itself has lifted sanctions partially and allowed funds flow from US Exim Bank and O P I C worth $300 million and $400 million respectively. Says FICCI president Sudhir Jalan: "The US is blowing hot and cold. On one hand they are lifting sanctions and on the other they are imposing such bans."
Will Indian companies be affected? Most companies do not think so. Says Vinod Doshi, whose company Walchandnagar Industries figures in the list: "The net impact of such a ban will be marginal because for all companies figuring in the list, any involvement in Indias space or nuclear programme is but a small portion of their overall operations." True, because the total money involved in the ban is worth only about $100-120 million, just a small fraction of Indo-US trade.
What will then be the net impact? Says Mitra: "They are crippling their own companies as the ban restricts their exports to Indian companies." Jalan reiterates this: "It is not in the best interests of US companies. India will now go to Europe and the net loser will be the US companies."
India also plans to lodge a strong protest in the World Trade Organisation (W T O) , but will it gain out of it? Article 21 of the W T O charter clearly states that any country could undertake similar action only when its security is threatened. Mitra feels that this is a contradiction in philosophical terms as multilaterally the US has conferred the Most Favoured Nation treatment to India but bilaterally it is resorting to such pressure tactics. Says he: "Article 21 is so drafted by the developed nations that it will be extremely difficult for developing nations to extract any advantage out of it. All India can do is fight on the interpretation of such a clause as US security is definitely not threatened by India." "Prima facie," says Jalan, "India has a strong case." A US official disagrees : " We dont consider that India has a good case." As an example, he spoke about the US embargo of Cuba imposed for security reasons which has been in place for nearly fifty years and has never been legally challenged.