How India fought back when the United States imposed sanctions on India.
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#India #nationaltechnologyday #pokharan #sanctions #Indianeconomy
Though the war between Russia and Ukraine is being fought with weapons, Russia is fighting another war with a different set of weapons. The United States and its allies are in an economic war with Russia with sanctions.
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Almost 24 years ago, India faced a similar situation when the United States and its allies imposed sanctions on India.
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Exactly 24 years ago, India conducted a series of nuclear tests in Pokharan, Rajasthan, on 11 May and 13 May 1998. These tests fortified India’s place as a nuclear power in the world.
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For a country like India surrounded by neighbours who pose greater threats, its nuclear arsenal is the most potent line of defence.
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Although the nuclear test was celebrated in India, many countries led by the United States condemned this series of tests.
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Nations used strong languages to warn and threaten India. The president of the United States went as far as saying, “South Asia is the most dangerous place on earth.”
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Heavy economic sanctions on India followed the warnings. The United States suspended all aid to India except humanitarian aid.
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Loans and grants from foreign institutions, including World Bank and IMF, were also suspended. Other Western countries imposed similar sanctions on India.
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These sanctions had the power to cripple the Indian economy. Just 7 years ago, India came out of an economic crisis and opened the Indian economy. The sanctions resulted in an immediate stop of Foreign investment in India.
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The Atal Bihar Vajpayee government was staring at a similar situation like 1991. The Vajpayee Government took an out of the box way to deal with the possible economic crisis.
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The Indian government launched the Resurgent India Bonds (RIB) for Non-Resident Indians (NRIs) on 5 August 1998. The bonds were issued by the SBI and planned to bring $2 billion.
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However, the NRI community opened their wallet to the government. In just 2 weeks, RIBs bought $3.1 billion to India. The number reached $3.5 billion on 24 August 1998.
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The bond sale ended with $4.5 billion in investment. To put it in context, the Indian Government took a $1.5 billion loan from IMF and World bank in 1997.
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These bonds helped the Vajpayee Government to increase the demand in the Indian economy by launching many successful infrastructure projects.
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In 1998, the Indian Government and NRIs together fought and defeated the United States and its allies in the economic war they wanted to impose on India.
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