India aircraft deal shields Modi from backlash over BBC tax raids

As Indian tax officials left the BBC’s offices in New Delhi and Mumbai following three days of tax inspections, it appeared that prime minister Narendra Modi had come through the episode without seeing any kind of diplomatic backlash from Western countries.

While the inspection of the BBC offices came a few weeks after the release of a documentary by the broadcaster examining Mr Modi’s role in the 2002 Gujarat riots, it also coincided with the prime minister’s announcement that a record 470 planes had been ordered by Air India from the world’s largest aircraft manufacturers, Airbus and Boeing.

The tax authorities said on Friday that they had found “several discrepancies and inconsistencies” in the records of a “prominent international media company”, understood to be the BBC. And while Mr Modi’s ruling Bharatiya Janata Party insisted that the tax authorities work independently from the government of the day, a spokesperson used the same press conference to attack the British broadcaster, calling it a “corrupt rubbish corporation” that was “spewing venom”.

Despite several rights organisations both in India and abroad condemning the raid on the BBC offices as an “affront to free speech”, support for the BBC in the form of a public statement issued by either the UK or the US government has been lacking.

Analysts have in part attributed this to Mr Modi’s political acumen, his successful leverage of the country’s importance as an economic and security partner, and India’s attractiveness as a growing market – factors they say have served to blunt criticism over the crackdown on dissenting voices.

Though the British Foreign Office issued a statement on the first day saying it was “monitoring” the situation, prime minister Rishi Sunak and the rest of the UK government have otherwise maintained a stoic silence on the matter.

Mr Sunak was, however, quick to hail the aircraft purchase announcement as one of the “biggest export deals to India in decades”.  “With wings from Broughton and engines from Derby, this deal will support jobs around the country and help deliver one of our five priorities – growing the economy,” he tweeted, on the same day as the Indian tax authorities began their action against the BBC.

The response from the US government was also limited. While US president Joe Biden issued a statement announcing the “purchase of over 200 American-made aircraft through a historical agreement between Air India and Boeing”, US state department spokesperson Ned Price shied away from issuing a categorical condemnation of the actions by the income tax authorities in India.

“We are aware of the search of the BBC offices in Delhi by Indian tax authorities,” he said, reiterating as a “general” point the Biden administration’s belief in “the importance of a free press around the world”.

Explaining the importance of the Air India deal, which is split between Boeing and Airbus, Gary Crichlow, aviation lead at London-based analytics group VV Aviation, said that the economic impact of the order would be felt globally.

“The commercial aircraft supply chain is global. Airbus operates final assembly lines in five countries,” including France, Germany, China, Canada and the US, he told The Independent.

“Boeing operates three facilities, in Renton, Washington; Everett, Washington; and Charleston, South Carolina. Both manufacturers have a supply base of more than 12,000 suppliers worldwide. For example, the main wing for the Boeing 787 is manufactured in Japan; Airbus’s A350 wing is assembled in the UK.”

Given its importance, experts feel that this deal cannot help but have played a role in the way in which Western governments have responded to the tax raids on the BBC.

“The fact [is] that while the raid was going on, the statements came in from both prime minister Rishi Sunak as well as president [Joe] Biden, hailing the deals, while the French president Emmanuel Macron appeared along with Mr Modi at the same time,” said Sushant Singh, a senior fellow at the Centre for Policy Research think tank. “Reactions have been very mild, clearly, because it’s a very big deal and it matters to these countries.”

The fact that Western powers appeared afraid to speak out as the BBC was being raided will definitely play well with Mr Modi’s base, said Mr Singh, only burgeoning his image as a strongman leader. However, he added, “Among other people who are more progressive liberals in India, there will be disappointment with the way Western democracies have responded, especially after they frame the global debate as being between democracy and human rights.”

The aircraft deal also matters for geopolitical reasons beyond simple relations with India – a country that remains delicately balanced on the fence when it comes to the global struggle over Ukraine. Over the past year, Russia has risen from being India’s 18th biggest trading partner to its fourth-biggest, with imports of Russian goods to India increasing from $9.86bn (£8.24bn) to $37.31 (£31.18bn) between April 2022 and January 2023.

If such growth persists, India’s Russian imports could hit $50bn, just shy of the value of goods shipped from the US, India’s third-largest partner.

“These realities are known to the West, and the United States has said that we are comfortable with whatever relationship India has with Russia,” explained Mr Singh.

“So clearly, for geopolitical reasons, for reasons of countering China’s influence in the subcontinent, the West is happy to overlook a lot of a lot of things that are happening in India, and willing to support India.”

The deal is also a strong validation of India’s policy of strategic autonomy, said Michael Kugelman, director of the South Asia Institute at the Washington-based Wilson Center. “The deal will reflect well on Modi. It’s an indication that he is committed to building up India’s military while partnering with key Indo-Pacific partners.

“New Delhi has concerned Washington and other Western capitals for its continued arms shipments from Russia. This deal will have a balancing effect, showing that India is keen to maintain its strong and growing arms relationships with Nato countries as well.”