Dear Financial Voice Reader,

Tuesday 03rd September 2019 15:38 EDT

‘What impact on India’s economy of the human rights situation in Kashmir’? That’s the question I was asked by the BBC on a interview about the Indian economy. And as so many readers of this paper will have financial interests in India let me expand upon what I told my interviewer.

The premise ‘of the human rights’ situation, if it is about ‘crackdown by Army’ is wrong. The human rights situation in Kashmir has been one about terrorism from Pakistan seeping not only into Kashmir but other parts of India from there. So to the extent the changes made mean less terrorism, then that is good for the economy.

The removal of Article 370 has led to jubilation in the country. That is good for the economy in two ways, first business see decisiveness. Without which economies falter. Second, it boosts moral and what Keyne’s called ‘animal spirits’. So again at worst, does not harm to the economy.

The liberalization of investment rules into Kashmir, for that’s what removing Article 370 does, means greater money entering the State. That opens up a whole new part of India to investment and growth and contribution to the country. Just as Northern Ireland has billions poured into it, and the terrorist guns fall silent. The peace dividend is a boost therefore for the economy of Kashmir and India as a whole.

Investment in India continues even after terror attacks, such as those in Mumbai, which from Mumbai when they happened the BBC asked me to comment on and their impact on the economy. So in London after IRA bombs, the investment did not stop. India growing at around 6% pa and aiming for much more with an Indian PM focusing more this term in his Premiership on jobs will make India a more compelling case for investment – as the recent Amazon announcement shows.

The bottom line is we can look at Kashmir in economic terms and see that capital moving into the territory will kill the independence move of an already very small minority (the ones not being paid to agitate) – probably the same numbers who in the UK if they were asked in Yorkshire would say they want a Republic of Yorkshire or in Scotland would say they want an Independent Scotland. Many countries have people who want their own nation. Even the Cornish have a movement. That you are violent does not strengthen your case. It weakens it, as Mahatma Gandhi knew and the IRA learnt.

Alpesh Patel

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