Corruption in India has been exposed in many forms of late and we have documented this in GWI. Politicians, Bureaucrats, Army Generals and Business Owners have been found to be guilty in numerous cases of corruption and pelf . Politicians and Businessmen have been jailed but they have managed to get out on bail using their millionaire lawyers to fake illness and other shenanigans. Some politicians are now involved in both professions with some rumored to be billionaires owning companies through surreptitious means and parking their money in Swiss banks. Business Groups in India see their shares rising and going down depending on which political party wins proving the nexus between politicians and businessmen. There has been no reforms to separate these two and now powerful politico-business dynasties have started ruling large parts of India.

Continuous scams and scandals have started derailing the story. Massive project delays,real estate shenanigans have resulted in a perceptible slowing of Indian growth.Infrastructure companies have started slowing down with some of the darlings even bleeding red ink from the growing problems. Combine this with inflation,inequity and rising interest rates has led to a sharp correction in the Indian stock market. With the Telecom Scam still afresh amongst the masses, there has been a major reputation tarnishing of India’s image not only amongst its own citizens but also internationally. While these cases have not led to a stoppage of Foreign investment into India, a major corruption case involving 2 top executives of Reebok & Adidas has the potential to massively damage India’s investment scenario. These executives are alleged to have siphoned off millions of dollars from their parent company taking advantage of their positions.

Note what has always been known but never exposed in the mainstream media is that C Level executives in India of MNC arms have been involved in underhand deals . It is widely known that top executives regularly take bribes in procurement contracts . Setting up of factories, offices allows the executives to collude with suppliers in cheating their companies with millions of dollars. However even in cases where wrongdoing is found, no legal action is taken as the company does not want to sully its own reputation. In the Reebok case, the executives are let to get away. Fortunately in this case the media has managed to unravel some of the dirty linen allowing criminal proceedings to start against the guilty parties. India is already suffering due to the 2G scandal in which big telecom companies of friendly countries are taking billion dollar hits. With a trust deficit between parent company headquarters and Indian headquarters, the investment into India could come down drastically. The private sector which has been the major engine of growth and innovation is also getting caught in the corruption tangle.


India has for long lacked an agency to control the monopolistic and predatory practices of Indian companies . The old MTRP Act had become quite toothless after the 1991 reforms and the Indian industry had turned into the wild west. Monopolies and oligopolies could operate quite freely and there was nobody to investigate price fixing and cartelization . Industries like telecom, cement and others saw many such abuses. However the situation is changing with the advent of a new authority Competition Commission of India.

Most of the developed countries like USA and European Union have highly developed and advanced competition regulators which impose hundreds of millions in fines against domestic and international companies who indulge in anti-market practices.The huge fines serve as a great deterrence where powerful corporates try to undermine the market forces through their sheer size. India’s new anti monopoly watchdog Competition Commission of India (CCI) has belatedly started operations.India has become large economy and it needs effective competition regulators against the giant conglomerates which manage to subvert the governing forces in the country.

This new agency has already made a mark imposing a stiff fine on the country’s largest real estate company DLF for using its market power to provide bad service to its customers . Note the real estate companies in India are notorious for various corrupt practices which have been written many times in this blog like creative accounting ,black money usage etc. Now the commission has started to examine the practices of powerful foreign MNCs like Apple and Google . The commission is examining whether Google is using its market share in search to stifle competition. The company is also looking at Apple selling its iconic iPhone through selected telecom operators only. While CCI was badly needed to ensure the rights of Indian consumers which are mostly a victimized lot, it should see that it does not waste its time on frivolous complaints.

From WSJ

The Competition Commission of India has begun an investigation of Apple Inc. for marketing the iPhone 4 in India through select mobile-phone operators, an approach that could allegedly harm other companies in the industry, a government official said late Wednesday. It was also revealed this week that the agency is investigating Google Inc. for alleged abusive behavior in online advertising in India. And the commission is targeting a wide range of industries, including cement and tire manufacturing, for alleged price fixing.

The Competition Commission has issued 10 orders totaling more than $250 million in penalties since it was established and is working through a slate of cases that could push that figure up substantially. The agency has targeted a number of companies for forming cartels, from explosives manufacturers, to film distributors, to pesticide makers, issuing fines large enough to wipe out a large chunk of several companies’ earnings.


The Indian Insurance Industrywhich was massively booming like the telecom industry at one time in India is now seeing similar troubles. The industry saw many entrants in partnership with foreign insurers as they looked to capitalize on the growing Indian market. However the story turned sour due to multiple reasons. The industry saw a number of exits in 2011 with retrenchment by the existing players as well. The reasons were

1) Increasing competition

2) Losses which meant increasing demand for capital

3) Reform of the ULIP product which was being mis-sold

4) Non-increase in the FDI cap

The story continues to sour with major companies like Future Generali too firing almost 30% of its workers and shutting down a number of its branches. The firings are taking place at all levels leading to massive job losses. Note this is similar to what is taking place in telecom companies in India as well where companies like Viom networks have fired hundreds. The lack of policy response by the moribound corrupt government is directly responsible for this . There has absolutely been no movement to try and resurrect these important industries by the government. The ministers are playing petty games like removing cartoons, taking potshots at each other and indulging in nepotsim and corruption. Like one commentator said that despite its democracy what India lacks is leaders who look after the national interest. Whatever the failings of China , there leaders are looking after the national interest rather than their self interest

Future Generali Life shuts 55 branches, cuts staff by a third

That has seen its workforce reduced by a third and the closure of 30 per cent of its branch network.According to sources, the downsizing is a direct fall-out of the slowdown in the business and the promoter’s plan to sell stake in the life insurance business.Sources indicate the company has abolished the positions of zonal heads and channel heads and significantly reduced the number of regional managers, area managers, branch managers and sales managers.There have been several exits at the senior management level, which includes the chief marketing manager, the head of the agency channel and others.


China’s massive state owned banks have given multi billion dollar credit lines to its China’s solar panel module companies. These credit lines can be used by these companies to give cheap debt to solar projects which are capital intensive. Note one of the biggest hurdles in setting up a solar power plant is to tie up the debt which can form upto 85% of the total capital requirements. Given the high interest rates in India , this makes a huge difference as the returns are lowered if the debt is costly .

China’s solar panel companies can used their government banks backing as a major competitive advantage. Just like  their telecom equipment companies ZTE and Huawei they can use the debt to win contracts over suppliers from India and elsewhere. Chin’a Wind Equipment Companies like Dongfang are also using the lure of cheap loans to win orders.

Like China’s Huawei and ZTE which have captured the Telecom Equipment market using low cost and Chinese Bank Lending,Dongfang is looking to capture the power equipment market as well.Note the proposal to put a 10% import duty on power equipment imports has been put in cold storage.There are a number of  small wind players in India which are trying to find a foothold alongwith India’s largest company Suzlon.The entry of Chinese Wind Companies should ring loud alarm the domestic industry as the Chinese could overwhelm the local industry here.The scale,size and government support of Chinese companies are on a simply different level compared to Indian companies.

Note there is a already a major controversy in the USA over the subsidies and support given to Chinese solar companies and has led to a so called solar trade war between the two . Even USA has used its EXIM Bank to provides millions of dollars in financing of solar farms which are supplied by US Solar Panel producers First Solar. Chinese companies Goldpoly are using the strong billion dollar lines to build solar projects in the Europe as well

GoldPoly,SunOasis,China Technology Development Group Corp have formed a JV to invest $10 billion in European Solar Projects using Financing from China Development Bank and Merchants Bank.Note these 3 companies have integrated facilities from processing of polysilicon into wafers to making solar panels.Its the first time that 3 Chinese companies have combined to promote such a massive project.The 3 companies are not listed in the US stock or HK stock exchange unlike other major Chinese solar companies like Trina,GCL,Suntech,LDK and others.Note China Development Bank (CDB) which is owned by the Chinese government has already extended billions of dollars in credit to Chinese solar panel companies like JA Solar,LDK and others.

US Exim Bank Loans in India

The US Exim Bank too seems to be pulling up its socks in helping American companies win large equipment orders through vendor financing.Note the US Exim Bank had got involved in a huge controversy when it agreed to finance a ultra mega power plant based on coal energy by Reliance Power in India.Despite protests by environmentalists,Exim Bank had gone ahead in financing as it would lead to jobs in America.Note USA is one of the biggest laggards in climate change and the government does not really care much out there.

Now the US Exim Bank has picked on 2 solar projects in India which are going to be built by Amercian companies.One is by the Thin Film Solar PV Leader First Solar and another by a small time Solar Thermal equipment supplier Infinia Corporation. Note the interest rates in India are extremely high compared to the US and vendor financing by a US bank leads to a massive increase in profits for the project owner.

Chinese solar major offers financing for Indian projects

China Sunergy, one of China’s larger solar module manufacturers, is willing to bring investments into solar projects in India, the company’s Chief Executive Officer, Mr Stephen Cai, told Business Line.

Nasdaq-listed China Sunergy, which last year supplied 45 MW worth of modules to two projects in Gujarat, is also interested in entering into strategic partnerships with Indian companies, he said.


China India Trade has been rising at very high growth rates over the last few years driven by the booming GDP growth in the fastest growing economies of the world. However India like other countries faces the mounting problem of a huge trade deficit with China which is growing all the time. Like Brazil ,USA this has become a major problem . Beside the official reported figures , there is a large clandestine trade takes place outside the normal channels. Massive imports from China go unreported to avoid excise duties and custom taxes. Both countries have corrupt officials and businessmen which facilitate trade without paying of taxes and duties. Unofficial Trade Deficit with China may be double the $27 billion reported in 2011.

Rising China and India Tensions

India and China are the Two Rising Global Behemoths with Relations between these most populated countries always being tense.Both countries share a similar history of colonization by Western Powers in the 17-20th Centuries and Independence being attained in the middle of the 20th Century.China and India also shared the same economic trajectory until 1979 when Market Reforms put China on track to become the 2nd largest economy in 2010.India also embarked on Reforms in 1991 and has started showing fast economic growth in recent times.The relations between these 2 countries are tense since the Border War fought between them in 1962.They have one of the longest borders in the world which is disputed.China recently upped the ante on claiming territorial rights over India’s North Eastern State of Arunachal Pradesh.

China’s Recent Provocations

Chinese provocations against India have been rising in recent times as the Chinese leadership wants to keep India off tilt.Here is a list of recent provocations against India

1) Stapling of  separate visas for India’s citizens from the state of  Jammu and Kashmir which is disputed with Pakistan

2) Trying to stall an ADB Loan to India’s state of Arunachal Pradesh

3) Support in Building Nuclear Reactors in Pakistan which regards India as an existential threat.It has also supplying Pakistan with missiles and  fighter aircraft.

4) Denial of visa to India’s top ranking military official on flimsy grounds leading to suspension of military contacts between the 2 countries

 5) Stationing of  11,000 troops in Gilghit Pakistan Occupied Kashmir (POK) which India regards as a part of its own territory and over which India and Pakistan have fought 3 wars

Many of India’s top companies like BHEL,L&T are being hollowed out by Chinese competition of low cost goods and super cheap financing. Power, Telecom equipment form a major chunk of imports while India is primarily exports resource like iron ore. So what is happening is that India is become a resource vassal economy of China (though it may sound simplistic) . China puts up big trade barriers for India’s value added exports like pharma and Information Technology while putting no hurdles for import of resources.With the rapid growth rate of imports , India is in danger of becoming dependent on China for a number of goods as its industries shut down in the face of competion.

China captures almost Half of the Power Equipment Market in India raising Concerns

India’s private players like Tata Power,Reliance Power and others are in the process  of setting up massive mega coal plants using supercritical boiler technology.While L&T and BHEL,the two Largest Capital Equipment Companies have won a lot of orders,the sheer scale of Demand requires Huge Imports as well.Low cost Chinese equipment providers like Shanghai Electric and Dongfang Electric have won almost half of the power equipment orders raising concerns amongst the Indian administrators.

Solar Panels are a good example of one such good where Indian industries can’t compete in the face of Chinese subsidies to its own companies.

The Indian government is not going to impose any new duties on imports of Chinese solar cells. This is despite the petition by the Indian solar panel manufacturers to give a level playing field. Note Chinese solar panels have virtually destroyed the solar manufacturing industry in the West with big companies falling under the relentless price pressure where solar panel prices have gone down by 60% in one year. Only the Koreans seem to be standing up to the Chinese government backed top tier solar companies from China. The rest have mostly folded up and are facing survival questions including those from Taiwan. Indian solar companies were never that big and cost competitive anyway given the headstart and support of the Chinese backed companies. The price crash in 2011 has seen most of them close their factories as they can’t even cover their costs at the Gross Margin Level.

India China relations have never been that great on a geopolitical level with the 1962 War and unresolved border dispute in the north. Recently the imports of Chinese telecom equipment from Huawei and ZTE raised a massive ruckus with Indian telecom companies supporting the Chinese because of low cost equipment while security concerns were raised.

China has recently been in the news over Internet Espionage on defense and sensitive installations in India and USA. This has led to the high profile exit of Google from China.Recently a Canadian research organization revealed/alleged  how Chinese govt backed hackers had broken into Indian embassy and government computers.This has made the Indian government wary of allowing Chinese equipment suppliers into India’s communication sector.Though both ZTE and Huawei’s equipment is much cheaper compared to Nokia  Siemens,Alcatel and Ericsson , these companies face an uphill battler in India right now.

Rising Trade Deficit Concerns

India’s trade deficit with China is estimated to reach $60 billion by 2014-15, up nearly three-fold from $23 billion in 2010-11. Bilateral trade with China was $63 billion in 2010-11, with China accounting for $43 billion worth of imports.

“Participants at the inter-ministerial workshop were especially worried about forecasts that China could account for 75% of India’s manufacturing in the next five years, up from the present 26%,” the official said. The workshop was attended by officials of key ministries and departments, including finance, home and the department of industrial policy and promotion.

“Excessive dependence can be disruptive in case of strained relations,” said Narendra Sisodia, a defence analyst and former additional secretary of NSC Secretariat. In general terms, if a country that is supplying basic components to another stops supplies, it would hurt the importing country because its manufacturing will be adversely affected, he said. “Much also depends on whether a country has alternative sources of supply and how quickly those could be mobilised.”



India is a country with one of the biggest population of poor people living hand to mouth. But becoming super rich in this country is quite easy if you know how. All you have to do is become a political crony and start counting your millions if not billions. Corruption in India has become rampant with a scam being uncovered almost every day. Politicians and Businessmen have been jailed but they have managed to get out on bail using their millionaire lawyers to fake illness and other shenanigans. Some politicians are now involved in both professions with some rumored to be billionaires owning companies through surreptitious means and parking their money in Swiss banks. Business Groups in India see their shares rising and going down depending on which political party wins proving the nexus between politicians and businessmen. There has been no reforms to separate these two and now powerful politico-business dynasties have started ruling large parts of India.

Leaders of Political parties have their favorite businessmen which they shower with goodies. There are example galore which is described below. Today a businessman in Uttar Pradesh was found to have stashed around $20 million in cash in the basement of a mall that he owns. Ponty Chadha is  real estate and liquor tycoon with close ties with the leader to that state. Both industries are rampantly corrupt and sources of massive black money generation. Like other scamsters expect this one to get away too.

Nira Radia reveals Sordid Corruption Nexus – DB Realty owned by Pawar,Tata Companies TCS,Tata Motors Bending Backwards in giving Favors to DMK Raja for Telecom License

Nira Radia the millionaire lobbyist who became a public figure overnight as tapes leaked to her phone conversations were printed by the mass media has revealed sordid details about the politician businessmen nexus.In the chargesheet presented by the CBI to the Supreme Court she has revealed the multi billion dollar realty company DB Realty is a front for Sharad Pawar and controlled by him.This hardly comes as a surprise as powerful Agri Minister Pawar has been linked to a number of corruption scandals like the Lavasa Scandal,2G Telecom Scam,IPL Scam etc.Note DB Realty CEO has been directly implicated in the transfer of bribe giving to Raja the former Telecom Minister in exchange for a Telecom License at dirt cheap prices.It is a tribute to the power of Pawar that despite such massive circumstantial evidence against him and his family,there has been no court case or police charges against him.Note a number of big companies in India are known to be secretly owned and controlled by powerful politicians.Not that politicians don’t own  billion dollar businesses openly and use their political muscle to further their own interests in a blatant manner.

India Corruption Unlimited – Sharad Pawar gets Linked in yet another Scam (DB Realty,Pune,Sule)

Sharad Pawar,India’s powerful agricultural minister and the president of the international cricket body ICC has managed to get involved in most corruption scams coming out in the last year or so.However he has managed to come out unscathed even as his fingers are in multiple corruption pies.The name of Pawar and his daughter Supriya Sule ( who is a MP what a surprise) has come up in multiple corruption scandals like the 2G Telecom Scandal,IPL Cricket Scandal and Lavasa Scam etc.However it points to his influence and reach,that nothing has happened.He is the leader of a regional party which is part of the ruling coalition in the centre.

The ICC and the BCCI are one of the most corrupt and opaque sporting bodies in the country.Cricket is a religion in India and generates billions of dollars in revenue which is monopolized by the BCCI which is a private cabal of corrupt politicians and businessmen.TheBCCI runs with no accountability and the corruption of the BCCI is openly condoned.The IPL Scam involving Modi revealed the extent of rot in the game administration and led to his ouster.However his mentor Pawar escaped without a blot.The arrogance and power of the BCCI is reflected in the fact it has refused to let enter any members of the electronics media into the final match of the World Cup despite a request from the information ministry.Now there is news that Pawar has close links with the real estate firm DB Realty which is another billion dollar corruption based company.DB Realty is one of the ringleaders in the 2G Telecom Scam being investigated by the Supreme Court.It has led to the jailing of India’s former Telecom Minister and revealed the systematic corruption in all major institutions in the country.

India’s Business and Political Elite continue to Mock Indian Laws;Raju gets Bail

India’s Business and Political Elite continue to mock the Indian Legal System through loopholes and expensive lawyers.I had written earlier in a post of how Satyam Scandal Kingpin Ramalinga Raju enjoyed luxurious facilities at hospitals despite his jail term.He had managed to avoid questioning by the authorities through excuses of bad health and now he has managed to get bail for the Biggest Corporate Scandal to hit India.This reduces the trust of the Indian citizens on  the State and tarnishes the reputation of the country as a vibrant democracy.A number of scandals have hit the Indian legal system with a powerful criminal convicted of murder recently partying in the capital.He had got time away from jail on the recommendation of the state government.Politically connected powerful criminals manage to enjoy jail time through lenient jail authorities who let them out frequently on flimsy conditions.Even in Jail,they enjoy a privileged existence denied to common criminals.Their army of expensive lawyers keeps finding loopholes to get off their rich clients as India’s Justice System remains mired under millions of long due cases.

It is a matter of concern that everyone of the accused in this scandal has managed to get bail as India’s premier agency CBI has not been able to build a watertight case till now.This is despite Raju accepting his role as the master rogue in the siphoning of millions of dollars from India’s 4th largest IT company at that time.Despite the media spotlight on this case,blatant corruption has won again.

“Corruption as Tradition” Justification in Bangalore Land Scam by Chief Minister of Indian State

Corruption in India has taken a widely virulent and blatant form with scams popping up almost everyday.Greed is Good has become  the motto for India’s Role Models in Sport and Military as well.India’s Politicians are Leading the  protagonists with Realty being the Main Theme.Note Real Estate companies in India are notorious for corruption with the sector being avoided by Fund Managers.India’s Southern State of Karnataka is known for its IT Industry with capital Bangalore famous as a Knowledge Hub.However the Politicians of that State have made it the Corruption Capital with Bangalore equally famous for Land Grabbing and Real Estate Scams by Bureaucrats and Politicians.Note the rest of Karnataka has also been made famous by Illegal Mining.Robber Mining Barons have become powerful enough to topple governments with some heading the administration as Ministers.

 The Chief Minister of the State has justified Corruption in Land Dealings as Tradition.Being Accused of favorably allocating Prime Land to Companies owned by his sons,he has sought to defend himself by accusing previous administrations of indulging in land scams as well.India’s Image of Corruption has become bleaker by the Day with the Commonwealth Games Scam,Adarsh Housing Scam and the Multi Billion 2G Telecom Spectrum Auction Scam.Now comes this Scam perpetrated by the leaders of the Chief Opposition Party.India’sPolitical and Business Elite have scant regard for India’s Justice System as hardly anyone is prosecuted for Corruption.Only some small fish are made scapegoats while the Ringleaders  blatantly and openly indulge in manipulation and corruption.