'Anti-minority' tag for India will hurt domestic cos, warns Rajan

Amid concerns over minorities being targeted in India, former Reserve Bank governor Raghuram Rajan on Thursday cautioned that an 'anti-minority' image for the country can lead to loss of market for Indian products and may also result in foreign governments perceiving the nation as an unreliable partner.

India enters the perception battle from a position of strength, the professor at Chicago's Booth School of Business said, alluding to credentials like democracy and secularism, but warned that this battle is "ours to lose".

The comments came a day after bulldozers tore down several concrete and temporary structures close to a mosque in Jahangirpuri as part of an anti-encroachment drive, days after the northwest Delhi neighbourhood was rocked by communal violence.

Speaking at the Times Network India Economic Conclave, Rajan said, "If we are seen as a democracy treating all our citizens respectfully, and, you know, relatively poor country, we become much more sympathetic. (Consumers say) 'I am buying this stuff from this country which is trying to do the right thing', and therefore, our markets grow."

He added that it is not just consumers who make such choices over whom to patronise, but warmth in international relations too is decided by such perceptions, as governments take a call on whether a country is a "reliable partner" or not, based on how it handles its minorities.

The outspoken academic added that China has been suffering from such image problems because of its treatment of Uighurs and to an extent the Tibetans as well, while Ukraine has seen huge support because President Volodymyr Zelenskyy is seen as someone standing up to defend ideas that a democratic world believes in.

The services sector export presents a large opportunity for Indians and the country will have to seize it, Rajan said, adding that we need to be very conscious of the West's sensitivities on privacy.

One of the opportunities which can be leveraged is in the medical sector, Rajan said, warning that being perceived as a country which does not satisfy data security and privacy concerns can make it difficult to succeed.

He also said undermining the constitutional authorities like the Election Commission, Enforcement Directorate or the Central Bureau of Investigation (SBI) erodes the democratic character of our country.

In other comments on domestic affairs, Rajan said the Indian administration will have to grapple with the challenges of governance by discussing changes with key stakeholders to avoid instances like the three farm laws. The three legislations were repealed last year after protests by farmers.

Meanwhile, Union Minister of State for Information Technology, Rajeev Chandrasekhar, who also spoke at the event, blamed IT companies for poor planning, saying this lack of foresight has led to wage inflation in the over $230 billion sector.

He also said getting high-quality connectivity to every corner through both wired and wireless connectivity is a policy priority and the ministry is working towards the same.