Coal mining in India and US sanctions: A reply to Simon walker

Abstract

Simon Walker notes that even without nuclear sanctions the Indian coal sector would still not represent a favourable location for private‐sector investment.¹ He states that the sanctions may have added to the problem of attracting foreign investors, but that the Indian Government should have taken this into consideration before it launched its series of nuclear tests. On receipt of Walker's comments, particularly on the bureaucratic attitude to liberalization of the coal sector, field investigations were conducted to try to reach the root causes of private sector failures to rise to the occasion when the opportunity presented itself to enter the industry (hitherto reserved for the public sector). The findings more or less concur with the observations of Walker, except that funds expected from resources abroad might have acted as a catalyst in helping the private sector to overcome the bureaucratically erected hurdles. Walker's views on nuclear sanctions are more alarming, however. The economic sanctions brought against India in the wake of nuclear tests in May 1998 were the result of a lack of perception by the international community of the security needs of India. Behind India's aim to have a nuclear deterrent policy is its wish to avert possible blackmail by the Chinese and Pakistan nexus, which has been active for some considerable time.