35
IT Started with a War
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[...] political sovereignty was handed over to Indians in August 1947. However, the capability of the Indian government to implement domestic policies according to its own will and needs was heavily circumscribed [...] indirect Western rule was maintained [...]
Indirect control was enforced by a variety of levers which would be applied should the Indian government ever stray out of line. The most important of these levers was access to food. At independence, India was barely able to feed itself. Maintaining access to food imports was thus a high priority for the Indian government, particularly in times of drought. A bad monsoon would, therefore, necessitate a massive importation of food which, given India's financial constraints, could only be met on concessional terms. Invariably, the only country able to offer concessions on such a scale was the USA, leading to Indian dependency on US largesse. This situation famously ensured India's compliance with the US operations in Vietnam. More importantly, it meant that India would not be able to follow policies which went against US interests until it achieved food self-sufficiency.
The other key Western lever over the Indian government was Pakistan. Pakistan is considered by many scholars to be the creation of Western and, in particular, British political scheming and geopolitical strategising in light of decolonisation and the emerging Cold War. [...]
[...]
While Pakistan was primarily established as a base and bastion for the projection of Anglo-American power into the Middle East and South-East Asia, its proximity to India also served to inhibit the Indian government from pursuing policies which might be deemed negative in London and Washington.
Owing to these conditions, the Indian government's economic policies following independence were highly conservative, particularly with regard to how Western capital was treated. [...]
that changed in the late 60s when agriculture improved and India became less reliant on food imports (esp the US govt). and in 1971, after the Indo-Pakistan war, East Pakistan broke away to form Bangladesh which weakened the Western proxy (now Pakistan) and made Pakistan less of a nat sec threat to India
so cool - never knew any of this before
[...] political sovereignty was handed over to Indians in August 1947. However, the capability of the Indian government to implement domestic policies according to its own will and needs was heavily circumscribed [...] indirect Western rule was maintained [...]
Indirect control was enforced by a variety of levers which would be applied should the Indian government ever stray out of line. The most important of these levers was access to food. At independence, India was barely able to feed itself. Maintaining access to food imports was thus a high priority for the Indian government, particularly in times of drought. A bad monsoon would, therefore, necessitate a massive importation of food which, given India's financial constraints, could only be met on concessional terms. Invariably, the only country able to offer concessions on such a scale was the USA, leading to Indian dependency on US largesse. This situation famously ensured India's compliance with the US operations in Vietnam. More importantly, it meant that India would not be able to follow policies which went against US interests until it achieved food self-sufficiency.
The other key Western lever over the Indian government was Pakistan. Pakistan is considered by many scholars to be the creation of Western and, in particular, British political scheming and geopolitical strategising in light of decolonisation and the emerging Cold War. [...]
[...]
While Pakistan was primarily established as a base and bastion for the projection of Anglo-American power into the Middle East and South-East Asia, its proximity to India also served to inhibit the Indian government from pursuing policies which might be deemed negative in London and Washington.
Owing to these conditions, the Indian government's economic policies following independence were highly conservative, particularly with regard to how Western capital was treated. [...]
that changed in the late 60s when agriculture improved and India became less reliant on food imports (esp the US govt). and in 1971, after the Indo-Pakistan war, East Pakistan broke away to form Bangladesh which weakened the Western proxy (now Pakistan) and made Pakistan less of a nat sec threat to India
so cool - never knew any of this before
42
[...] Of the various TNCs operating in India, IBM was singled out [...] 'abuse' of a bureaucratic loophole had allowed it to exert a stranglehold on the market while importing outdated, second-hand and overpriced computers for resale in India. Morever, its operations were seen as leading to a net export of foreign exchange. Dilution of the IBM subsidiary as a means of obtaining control over its activities was therefore most apposite. Control would not only curb many of IBM's economically damaging activities, it would also facilitate the country's computerisation as well as support a more favourable balance of payments.
In the end, IBM refused to dilute its stake in its subsidiary [...] IBM made a number of alternative offers - including a high export commitment from domestic production. These offers were all turned down by the Indian government. IBM - at the time the largest corporation in the world - was forced to close down its Indian operations in 1977.
However, the absence of IBM in the Indian market prompted another computer firm - Britain's International Computers Limited (ICL) - to engage in a joint venture. ICL deemed the potential commercial gain through enhanced market share as outweighing any costs attached to sharing managerial control. [...]
wonder how feasible this would be for tech companies in this day and age (and whether it's even a desirable proposal)
[...] Of the various TNCs operating in India, IBM was singled out [...] 'abuse' of a bureaucratic loophole had allowed it to exert a stranglehold on the market while importing outdated, second-hand and overpriced computers for resale in India. Morever, its operations were seen as leading to a net export of foreign exchange. Dilution of the IBM subsidiary as a means of obtaining control over its activities was therefore most apposite. Control would not only curb many of IBM's economically damaging activities, it would also facilitate the country's computerisation as well as support a more favourable balance of payments.
In the end, IBM refused to dilute its stake in its subsidiary [...] IBM made a number of alternative offers - including a high export commitment from domestic production. These offers were all turned down by the Indian government. IBM - at the time the largest corporation in the world - was forced to close down its Indian operations in 1977.
However, the absence of IBM in the Indian market prompted another computer firm - Britain's International Computers Limited (ICL) - to engage in a joint venture. ICL deemed the potential commercial gain through enhanced market share as outweighing any costs attached to sharing managerial control. [...]
wonder how feasible this would be for tech companies in this day and age (and whether it's even a desirable proposal)
43
And so the 1972 Software Export Scheme was born. The scheme set out to harness the software programming talent within India's management consultancies. While providing software services was by no means the chief source of income for these consultancies, they would often have on their books a number of people educated in computer software and would lease them out to Business Houses to write specific software programs. This process - an early, domestic form of body-shopping - was widespread [...]
The scheme sought to transform these management consultancies with a side interest in software services provision into bona fide software firms competing in the global market. [...] providing 100 per cent loans on computer purchases to all firms that signed up. Given the small size of such firms and the prohibitive costs of computers at the time, this was the only means by which firms could gain access to their own computers [...] it needed to ensure that firms would use these computers to produce software for export rather than for the domestic market. As such, firms signing up to the scheme were prohibited from providing services to the domestically installed hardware base. Moreover, loans had to be repaid through foreign exchange generated only via the export of software. [...]
And so the 1972 Software Export Scheme was born. The scheme set out to harness the software programming talent within India's management consultancies. While providing software services was by no means the chief source of income for these consultancies, they would often have on their books a number of people educated in computer software and would lease them out to Business Houses to write specific software programs. This process - an early, domestic form of body-shopping - was widespread [...]
The scheme sought to transform these management consultancies with a side interest in software services provision into bona fide software firms competing in the global market. [...] providing 100 per cent loans on computer purchases to all firms that signed up. Given the small size of such firms and the prohibitive costs of computers at the time, this was the only means by which firms could gain access to their own computers [...] it needed to ensure that firms would use these computers to produce software for export rather than for the domestic market. As such, firms signing up to the scheme were prohibited from providing services to the domestically installed hardware base. Moreover, loans had to be repaid through foreign exchange generated only via the export of software. [...]