One more way the Soviets fleeced India

Or, the price of friendship

They didn’t just bribe politicians and compromise diplomats, as T V R Shenoy writes, the Soviets cheated the Indian economy too.

At any rate, cutting a deal in Delhi meant the involvement of the one indispensable figure — the middleman. The Soviets came to India with a large shopping list — spices from Kerala, coffee from Karnataka, tobacco from Andhra Pradesh, tea from Assam, hosiery from Punjab, grain from practically everywhere…

I have no idea if the Soviet Union gained any military advantage or rare political insight through this trade with India. However, what everyone knew is that India was getting a raw deal thanks to some questionable decisions. For instance, the rouble was kept at an artificially high level that had no relation to reality. This meant that Indian goods were terribly underpriced when they were delivered to the Soviet Union.

The good Comrades took advantage of this to earn hard currency — US dollars, German marks, Swiss francs, and the like; they sold Indian tea, for instance, at the actual market rate. We were getting worthless roubles while they were getting the dollars we should have earned, in effect India was subsidising the Soviet Union! [Rediff]

2 thoughts on “One more way the Soviets fleeced India”

  1. That’s what happen when the prime minister signs business deals instead of businessmen. Weren’t we buying military hardware with these roubles?

  2. It was, like Chandra mentioned, partly being repatriated through inexpensive military hardware. But then again, that hardware was not even close to ‘current generation’. It was sort of outdated trash that was in some ways, ‘dumped’ on India.

    But I think it was our Prime Minister Nehru’s great socialist vision and since the commies up north had some match in the socialist vision, it became a natural fit for the birds of a feather to flock together.

    But was the socialist vision in fact worth it?

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