INDIA: Political implications of the gas disaster

Analysis

The magnitude of the disaster was at first grossly underestimated in India. Both local and national authorities were caught by surprise. Now they are trying to make amends.

Even under normal circumstances such a disaster would have aroused strong passions, especially given India's long history of suspicion of multinationals, but with only a few weeks to go before elections the outcry is that much louder. The opposition will obviously attempt to exploit the disaster as an election issue.

Prime Minister Rajiv Gandhi is therefore under strong pressure to appear to be acting forcefully. The fact that the disaster occurred in a state where his own Congress (I) party is in power increases this pressure.

However, the quick release of Warren Anderson shows that Indian authorities are likely to keep their reaction within bounds. Although legal battles may be long and acrimonious, Rajiv Gandhi has many good reasons for trying to limit the political fallout:

-- He does not wish to worsen relations with the United States.

-- He knows that measures against American citizens or multinational companies put American aid at risk. This is not large but it is sufficient to matter.

-- Since multinationals already operate under very tight controls in India there is little or no scope for further tightening.

-- Further pressure on them could lead them to withdraw from India. Since they provide jobs and economic benefits their loss would be felt.

-- Indian elites have a significant interest in multinationals. Jobs with them are much sought after, and many of Rajiv Gandhi's schoolmates, now playing an important role in Delhi, have close links with them.

-- Studies have countered criticism that multinationals in India interfere in politics or ignore legal constraints. This should weaken opposition criticism.