On May 10, addressing a BJP rally in Hyderabad, Telangana, the Prime Minister issued seven appeals to the nation: to work from home; avoid buying gold for one year; reduce petrol and diesel consumption; cut down the use of cooking oil; reduce use of chemical fertilisers by 50 per cent; buy Indian-made goods in place […]
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On May 10, addressing a BJP rally in Hyderabad, Telangana, the Prime Minister issued seven appeals to the nation: to work from home; avoid buying gold for one year; reduce petrol and diesel consumption; cut down the use of cooking oil; reduce use of chemical fertilisers by 50 per cent; buy Indian-made goods in place of foreign brands; and avoid foreign travel for one year. The purpose of these sacrifices, he said, was to conserve foreign exchange.
It might seem puzzling that the Prime Minister is asking people to conserve foreign exchange, whereas the RBI Governor, the Finance Minister, the Informal Group of Ministers, sundry economists and the media have been reassuring the public, day after day, that the country has ample foreign exchange reserves. Paying no heed to this flood of assurances from the powers that be, both the rupee and share prices fell sharply the day after the Prime Minister’s speech.
The foreign exchange market and the share market know what officialdom and the media prefer not to mention: that India’s foreign exchange reserves are not the accumulated surpluses from trade, i.e., earned from exporting more goods and services than we import. In fact we consistently run deficits on our current account. Instead, the reserves are made up of liabilities – i.e. they are the sums of money that we owed to other countries/persons abroad. If foreign creditors decide not to roll over debt, and foreign investors decide to withdraw their investments, the foreign exchange reserves will fall. In that sense, they are not really ‘reserves’ at all: they are not a buffer against distress.
In that sense, the Prime Minister is quite right to raise the alarm. However, his remedy appears to be for the people at large to sacrifice, and lower their standard of living. For example, his appeal to cut down the use of cooking oil is addressed to every household; his appeal to halve the use of chemical fertilisers is addressed to farmers, the single largest section of the country’s workforce.
Such exhortations are unlikely to inspire the desired self-sacrifice, but they lay the ground for imposed sacrifices. The Informal Group of Ministers, while assuring the public of adequate oil, gas and fertiliser supplies, also indicated that the burden of keeping prices at their present level was weighing heavily on the fisc, and may not be sustainable if the international crisis got prolonged.
In other words, the people are being told: prepare to tighten your belts.
But it is not the common people who have created the present foreign exchange crisis.
Who is responsible for the outflow of foreign exchange?
1. It is not the common people that account for the sudden rise in gold imports, which rose by 24 per cent last year, to nearly $72 billion. World Gold Council data for calendar 2025 indicates that 40 per cent of India’s gold imports were accounted for not by jewellery, but by investment demand. That is, wealthy financial investors bought gold to protect their wealth against a fall in the value of the rupee – and indeed furthered the fall of the rupee in the process.1
2. It is not the common people that send large sums of money out of the country. It is India’s globalised upper classes who have spent over $202 billion in foreign exchange under the Liberalised Remittance Scheme since May 2014, about half on foreign travel and the remainder on other heads. In just the last four years (up to February 2026), they spent $112 billion.
3. The common people of India do not set up ‘family offices’ abroad to manage their global wealth. It is India’s super-rich, people like the Ambanis, that do so. By 2023, the super-rich transferred $130 billion to their family offices in Singapore and $105 billion to those in Hong Kong. (We could not locate a figure for Dubai, another favoured site for this activity.) Some of these funds may be transferred legally.
The super-rich also carry out vast illicit transfers of wealth from India, bringing back sums illicitly when they wish, a process called ‘round-tripping’. Studies have found the sums flowing in and out in this fashion run into the hundreds of billions of dollars, but the powers that be are uninterested in investigating. The sums are staggering: to cite just one type of potential illegal transfer: “orphan imports”, where import payments are made, but no goods were ever despatched, totalled $659 billion over 2000-2018. That is nearly as large as India’s present foreign exchange reserves.
These flows may explain how Indian billionaires manage to accumulate vast funds in offshore tax havens. The Ambanis (not only Anil, but Mukesh), the Adanis, and Agarwal of Vedanta are only a few of the most prominent names. They do not live in fear of being arrested. The much-celebrated digitalisation of India’s tax machinery is being used to hunt the smallest fishes, while giant fishes roam freely. “It will take a long time for us to move ahead in this particular case,” said an official of Mukesh Ambani’s offshore accounts. Mr Adani has emerged spotless from regulatory inquiries. Mr Agarwal lives unmolested in London, where his company is headquartered. (Meanwhile the Indian government actively ousts tribals from their forests and hills, to turn these assets over to Mr Agarwal.)
4. It is not the common people of India who have piled up $292 billion of external commercial borrowings (ECBs). It is the corporate sector which has done so.
Source: RBI database.
Among other things, available foreign borrowings (ECBs) fed the dreams of India’s corporate chieftains in the boom of the 2000s. They went on a vanity shopping spree of companies abroad. Each such loan-backed acquisition added to India’s external debt. Tata Steel made the most outlandish buy, picking up Corus, a U.K.-Dutch firm four times the size of Tata Steel itself, and thereby catapulting themselves into the world’s top 10 steelmakers. The Tatas initially bid $8 billion, but entered a bidding war with another buyer, and finally splurged over $12 billion. The acquisition saddled Tata Steel with foreign loans of $8-9 billion, implying annual interest charges of over $700 million. Corus promptly made steady losses, but the Indian operations of Tata Steel kept generating the cash needed to service its foreign borrowings. Thus India’s natural wealth and surplus flowed to foreign banks.
(As an aside, one might ask where, in these times of foreign exchange stringency, Mukesh Ambani plans to obtain the $300 billion he has promised Trump he will invest in a refinery in Texas – a deal Trump calls “THE BIGGEST IN U.S. HISTORY”.)
5. The corporate sector might try to justify these borrowings by saying they are necessary for importing capital goods and making Indian industry more efficient. However, in this entire period, the trade deficit of India’s manufacturing sector has continued to balloon.
Even as it has raked in handsome profits, Indian industry has failed to invest in research and development (R&D), and has preferred to go in for repetitive technology imports, all paid for in hard currency. India’s R&D expenditure is a meagre 0.6-0.7 per cent of GDP; indeed it has been falling since 2010. Within this meagre spending on innovation, only 36 per cent is in the private sector – the rest is in Government labs. It is telling that the private corporate sector’s R&D spending is about half of what India pays out at present on royalties to foreign firms.
Thus India’s celebrated ‘telecom revolution’, near-universal coverage of mobile telephony, has come and gone, without India’s private corporate sector making anything – neither the equipment nor the software nor even the mobile devices. India’s software giants, TCS, Infosys, and the rest have raked in profits at a hectic pace over the years, but actually shrunk their capital expenditure as a share of their cash from operations. Little wonder that they are now facing a question of their existence.
So it is India’s special class of corporate chieftains who have rendered India permanent dependent, causing it to bleed trade deficits indefinitely. This dependent corporate class drains foreign exchange, and indeed the surplus, from India.
6. Fundamentally, over decades of neoliberal policy, India has been increasingly exposed to flows of international speculative capital. Foreign portfolio investment (FPI) in India’s share market is particularly volatile, but foreign direct investment (FDI) too now consists mainly of speculative financial investments by private equity firms and the like, routed through places such as Singapore and Mauritius. India’s outward FDI too goes to such tax havens. As India’s economy enters more turbulent times, FPI investors are pulling out their money, and FDI net inflows have plummeted. In recent years the Government also opened up government bonds for foreign investors; these investors too are now exiting, and the Government is contemplating giving them tax concessions to lure them back.
All this underlines the fact that capital account liberalisation, i.e., the opening up of the economy to unrestricted capital inflows and outflows, has rendered India more vulnerable. It is thus State policy which is responsible for the present situation: Not the Iran war, nor the consumption needs of India’s common people.
Who is responsible for the shortage of essential commodities?
7. India’s kisans are now told to halve their fertiliser use, as if it were like taking less sugar in one’s tea. This exhortation subtly implies that the kisans are responsible for India’s fertiliser crisis, by their wasteful application. In fact it is the Indian rulers, of both Congress and BJP varieties, that are entirely responsible for the crisis. By 2000, India was self-sufficient at least in urea (on a predominantly public sector base). Thereafter, successive neoliberal governments stopped public investment, even closing down several public sector plants. The private corporate sector made meagre investments. Although the BJP government eventually decided to revive five public sector fertiliser plants, even this was too little to ward off the shortage and import dependence we see today.2 India is staring at possible shortfalls just as sowing operations are about to start
India’s rulers received ample warnings from three recent international shocks. The first was during Covid, when urea prices tripled. The second was when fertiliser prices again soared with the Ukraine war. In these years, shortages of fertiliser in various regions resulted at times in riots as well as peasant suicides. Finally, in June 2025, when the US and Israel attacked Iran, it was clear that the Hormuz Strait might at some point be closed, blocking shipments of fertiliser as well as LNG (a feedstock for fertiliser). All these warnings were ignored by the Indian authorities.
So kisans are told today to simply make do with less. In fact, since 50-55 per cent of the present yield of foodgrains is attributed to the addition of chemical fertilisers, any such drastic step would simply lead to a fall in output.3
8. India’s common people are instructed to eat less edible oil, in the cause of saving the country foreign exchange. But the people are certainly not responsible for the country’s gigantic dependence on imports of edible oils. India’s peasantry had made the country self-sufficient in edible oilseeds in the 1990s, with help from the National Mission on Oilseeds of 1986. However, with India’s entry into the WTO, the protection for domestic oilseeds was dismantled, and Indian growers could not compete with cheap palm oil imports. Thus India, a country of 1.4 billion, is now the world’s largest importer of edible oil, and depends on imports for 56 per cent of its consumption! Successive Indian governments have failed to promote domestic production of oilseeds with a procurement policy. This critical part of people’s diet is left to the vagaries of international trade and our supplies of foreign exchange.
9. The common people of India, who are asked now to minimise their use of petrol and diesel, may well wonder whether the Government had made any plans for the present contingency. The contrast with China is striking.
However, the Indian government cannot take all the blame for its petroleum policy, since it does not formulate that policy. That job has been left entirely to the US government. After Trump, in his first term, demanded India stop buying Iranian or Venezuelan oil, India promptly obeyed in May 2019. In his second term, Trump demanded India end all imports of Russian oil (which India got at a discount), failing which he would add an extra 25 per cent tariff on top of his existing 25 per cent. India duly started to cut its Russian oil imports. After the US kidnapped the Venezuelan president, and got control of Venezuelan oil, Trump pushed India to buy it. India started importing Venezuelan oil.
The US gave India a temporary waiver for Russian oil when the war with Iran started, and India once again began buying it, but when that waiver expires, it may have to stop again. Despite India’s being in desperate need of liquefied natural gas (LNG), and despite Russia’s offering to provide it on a long-term basis, India has declined Russia’s offer.4 Instead the US is compelling India to buy US LNG at exorbitant prices.
As the Indian government has discarded even the fig leaf of sovereignty over its own oil policy, all that remains for it is to exhort its citizens to use less petroleum products (including fertilisers), and preferably stay at home.
10. As mentioned earlier, the Informal Group of Ministers, in its press release of May 11, hinted that the present price levels could not be borne by the Government if the war got prolonged. After all, they pleaded, India’s oil marketing companies have absorbed losses of close to Rs 1,000 crore a day, so that “the burden of global astronomical prices is not passed on to the Indian citizens.” The Finance Ministry more frankly says that “Pass-through of higher import prices to end-users will also moderate demand growth, and, with it, the pressure on the current account [i.e., the broadest measure of trade deficit].”5
This ignores the fact that the Centre alone rakes in Rs 3.5 lakh crore in taxes on crude oil and petroleum products in a year, and it raked in over Rs 19 lakh in the five years ending 2024-25. This is an extremely regressive tax, extracted from all the citizens of India, even the poorest of the poor. Why can the Centre not now protect the people from a price hike?
While the Government prepares to tighten the belts of the people, it is worth remembering how it loosened the belts of the corporate sector in 2019, by handing it a giant cut in direct taxes. The share of corporate tax revenue in gross tax revenues of the central government fell from 32 per cent in 2019 to 25 per cent in 2025. A parliamentary committee estimated the revenue loss in just the first two years after the cut at Rs 1.84 lakh crore. The loss would have risen thereafter, as corporate profits rose further.
The supposed purpose of driving India’s corporate tax rates to among the lowest in the world was to spur investment; but in fact, as India’s chief economic advisor recently remarked, “Corporates and the second or third generation entrepreneurs chose to accumulate those cash profits and probably set up family offices elsewhere [i.e., business families’ offshore wealth management firms] rather than investing in real assets on the ground.”6 As the big bourgeoisie have made off with lakhs of crores, India’s common people are being asked to tighten their belts yet further. The recent eruption of working class protests indicates they may not be willing to do so.
The common people do purchase gold out of traditional compulsions, including for dowries, but in fact they bought less gold in 2025 – they simply paid a higher price for it. ︎
It is true that some level of imports is required as India has no domestic source of potash. The point is that the dependence today is much greater than it need be. ︎
No doubt there is a case for reducing unbalanced and unscientific use of urea at many places, as well as introducing organic manures and bio-fertilisers. However, any blanket advice may cause grave harm, as soil conditions vary greatly and proper testing is required – for which a major public sector effort is essential. ︎
Russia has also reportedly offered to supply India fertilisers such as potash, phosphorus and urea. These too, however, would have to cleared by Washington. ︎
Department of Economic Affairs, Monthly Economic Review, March 2026. Emphasis added. ︎
T.C.A. Sharad Raghavan, “After govt. pulls up private firms on investment, CII says capex grew 67% in September 2025”, The Hindu, May 11, 2026. ︎
— Arish Amber The Chalo bus was recently introduced in partnership with Mumbai’s Brihanmumbai Electric Supply and Transport (BEST) undertaking. It promises comfortable and fast travel, with digital-only ticketing options, at premium prices. As the beleaguered BEST struggles to maintain its ordinary services and increasingly heads towards privatisation, commuters find themselves excluded on the basis […]
The Chalo bus was recently introduced in partnership with Mumbai’s Brihanmumbai Electric Supply and Transport (BEST) undertaking. It promises comfortable and fast travel, with digital-only ticketing options, at premium prices. As the beleaguered BEST struggles to maintain its ordinary services and increasingly heads towards privatisation, commuters find themselves excluded on the basis of income, location and digital access, all of which are linked to class. The paper explores exclusions in terms of these dimensions, and finds that the process of premiumisation is taking place at the cost of the ordinary commuter. It finds that for every 1 per cent increase in passengers’ income, there is a 4.9 times higher probability that they would choose the Chalo bus. On the other hand, ordinary passengers, with lower incomes and less penetration of the Chalo app, are left in the lurch.
Providing premium transport options for white-collar staff may enhance the “ease of doing business” for international investors in Mumbai’s financial and digital sector, but the city’s working class commuters suffer. The study also discusses the role of a public transporter and what makes it public in character.
Buses and railways are central to people’s mobility in the megapolis of Mumbai, transporting millions of passengers every day. However, underinvestment in these modes by the authorities leads to a plethora of problems, which are borne by commuters and transport workers. BEST’s buses carry more passengers daily than all metro lines in the city combined. Yet policy-makers focus on what they call the losses of BEST, rather than prioritise its public funding and thereby alleviate the problems of passengers and workers.
Rather than invest in the mobility of many, Mumbai’s authorities have chosen to invest in the mobility of a few. One form of this bias is the recently introduced Chalo bus service. This paper examines premiumisation of BEST buses at the cost of the ordinary bus passenger, excluded by income and space.
Chalo bus began its operations in Mumbai in 2022, with routes focusing on the Chhatrapati Shivaji Maharaj International Airport and Bandra-Kurla Complex (BKC). As of June, 2024, Chalo operates a total of 144 premium buses. Of 31 routes run between June 2023 and November 2024, 10 start or terminate at BKC, 6 each at Andheri and Navi Mumbai, 7 at Thane (including one each going via Lodha and Hiranandani estates), and 4 each at the city airport and in South Mumbai. In this fashion the Chalo service is targeted at ‘prime’ locations.
Data and method
Data for this paper are drawn from a primary survey of 180 passengers in December 2024 at bus stops at the city airport, Bandra, BKC, Kurla, Deonar Depot, Chembur, Andheri, Vashi, Belapur, Kharghar and Thane. Using statistical methods, we examine the factors influencing passengers’ choice of the Chalo bus, as well as their choice of alternative modes. These exercises reveal a pattern of premiumisation of services and exclusion of ordinary commuters.
Secondary data have been obtained from public authorities such as Brihanmumbai Municipal Corporation (BMC) and their reports. BEST provided data on the revenue of Chalo buses, in reply to an RTI application.
Privatisation and the wet lease model
For the neoliberal state, privatisation is the panacea to all the maladies around us. A study of liberalisation of public transport services in London (UK), Santiago (Chile), Delhi (India), Nairobi (Kenya), Dar es Salaam (Tanzania), Port Moresby (Papua New Guinea) and Harare (Zimbabwe) has shown conflicting and diverse results, which makes it hard to substantiate the claim that privatisation is the pill for every ill of public transport (Maunder & Mbara, 1996). Higher fares of private buses ensured that access remained restricted.
In India, public-private partnerships (PPP) in public transport have been operationalised through either a net cost contract or a gross cost contract (WRI, 2021). BEST has initiated the wave of privatisation of public transport buses under gross cost contracts,2 also known as the wet lease model. BEST’s decision to wet-lease its core services has led to concerns about the future of the institution (Research Unit for Political Economy [RUPE], 2019). As of January 2026, following the end of codal life of buses procured under Jawaharlal Nehru National Urban Renewal Mission (JnNURM), BEST has a fleet of 2,744 buses, of which 2,495 have been leased on a gross cost contract basis, while only 249 are state-owned (Shaikh, 2026). This is in direct violation of the promise made by the Brihanmumbai Municipal Corporation (BMC) and the BEST management in their Memorandum of Understanding with BEST unions in 2019, which guaranteed that BEST would own and operate at least 3,337 buses.
In the UK, as brought out by Alston et al. (2021), thirty years of privatisation of bus services have resulted in private profit determining the running of public transport. Deregulation and privatisation of public transport buses in the UK have led to an expensive and unreliable bus system, where routes are rationalised only on the basis of what is profitable. This has seriously injured the human rights of those who rely on bus services. Contrary to the claims that public transport would turn profitable following privatisation, in fact the public exchequer pays out massive subsidies to private players in lieu of their services. Once public transport is privately operated, any profits achieved through operational and structural streamlining do not get re-invested. Alston et al. make out a strong case for public control and ownership of public transport.
A study has questioned the sustainability of a wet-lease model for BEST buses, since wet-lease agreements provide for only marginal profits; even these profits are generated by depressing workers’ wages (RUPE, 2019). Given the low margin of profit, it is apprehended that contractors might later demand a revision of rates. The experience of other cities acts as a cautionary tale: contracting out public transport bus services in Delhi and Pune led to poor maintenance and rash driving, and in Bengaluru, it failed to improve the finances of the bus service. Further, BEST’s decision to acquire smaller 9-metre buses on wet lease significantly reduces the carrying capacity of the entire fleet. While BEST justifies the introduction of smaller buses on the ground that they are more manouevrable, it does not explain why it failed to procure sufficient additional buses to at least maintain the existing carrying capacity.
Workers employed by wet-lease operators complain that wages are low, paid irregularly, and further reduced by arbitrary deductions. Disputes over wages have led to at least 16 strikes by BEST wet-lease workers between 2019 and 2025. Workers’ demands include timely payment of salaries, weekly offs, pending holidays, extra time and a salary hike. There is a danger that depressed wages may push wet-lease workers to seek other employment opportunities beyond their BEST shifts, leading to weariness and compromising driving safety. Further, with fewer and fewer buses left to drive or maintain, BEST’s permanent conductors, drivers, mechanics and workshop staff have become a “surplus workforce”. This weakens unions even further (Sequeira, 2025). A similar phenomenon can be seen in Delhi (Mani, 2025).
Premium services
Why do city authorities introduce premium bus services, which cater to a narrow section of the commuters? Proponents of such a step claim that premium services will draw car owners to public transport, and thus reduce the number of vehicles on the road. If we divide bus riders into two categories, ‘captive riders’ (travelers without cars) and ‘choice riders’ (travelers with cars), the latter can choose whether to travel by bus or car. For them, the fare is less important than comfort and punctuality. (Cheranchery et al., 2020). If they were to travel by ordinary public transport buses, they would suffer overcrowding, waiting time and greater travel time, and so they prefer to use their own cars to travel. Premium bus services fit in with a broader ideological frame of the new urbanization being promoted for the global south, of which speed is a key feature (Datta & Shaban, 2016). Premium bus services are thus meant as a type of elite bypass operation for the state of actually existing urban transport.
Findings
Descriptive statistics
The primary survey was conducted among a total of 180 respondents, of whom 122 (67.8 per cent) were male and 58 (32.2 per cent) were female. Chalo bus and ordinary bus passengers number 90 each in the sample. Among the surveyed women, nearly 67.8 per cent took the Chalo bus and 36.2 per cent take ordinary buses; among men, a greater proportion (56.5 per cent) took the ordinary bus.
Of the surveyed passengers, 16.7 per cent are 18-25 years of age, 55 per cent are 25-45 years of age and 28.33 per cent are aged above 45 years. Most working passengers fall in the 25-45 years category, while those above 45 years of age also include retirees. The minimum monthly income of the sample was Rs. 6,000 while the maximum was Rs. 5,00,000. The mean income of the sample was Rs. 1,17,776, with a standard deviation of Rs. 1,21,008, revealing that the values are spread over a wide range.
Nearly 49 per cent of surveyed passengers of ordinary buses earned less than Rs. 20,000 a month, and another 50 per cent earned between Rs. 25,000 and Rs. 75,000. Only 1 per cent earned between Rs. 75,000 and Rs. 1,50,000. The mean income of passengers of ordinary buses was about Rs. 26,208 and the standard deviation is Rs. 14,652. In the case of Chalo bus passengers, however, there was a concentration in the income categories above Rs. 75,000 a month: 33 per cent earned between Rs. 75,000 and Rs. 1,50,000 a month, 40 per cent earned between Rs. 1,50,000 and Rs. 2,50,000 and 23 per cent earned above Rs. 2,50,000 a month. In the income categories below Rs. 75,000 a month, only three respondents took the Chalo bus; these are the outliers. In all three cases, the cost of the premium ticket was reimbursed to them by their employers. It is remarkable that the mean monthly income for Chalo bus passengers was Rs. 2,09,344 (that is, almost 8 times the mean income of ordinary buses), with a standard deviation of Rs. 1,10,805. Among the surveyed respondents, 51 per cent were employed as workers, 35 per cent as junior management, and nearly 14 per cent as senior management.
Figure 1: Income of sample
The survey finds that ordinary bus passengers spent an average of Rs. 22 on their daily commute, while Chalo bus passengers spent an average of Rs. 298. While the maximum daily expenditure for ordinary bus passengers was Rs. 70, the same for Chalo bus passengers was Rs. 520. The huge difference between these figures corresponds to the gulf in income between the two sets of passengers.
Travel characteristics
For ordinary bus passengers, the mean distance travelled was 9.4 km. Chalo bus passengers travelled a distance of 25.29 km, over 2.5 times the distance of ordinary bus passengers. The average distance between passengers’ residence and the bus stop in Mumbai was 0.88 km. For ordinary passengers, the average distance was 0.42 km, while for Chalo bus passengers, it was 1.34 km. The distance between one’s residence and the bus stop was significantly higher for Chalo bus passengers, implying additional expenditure for intermediate transport to reach the bus stop. Since premium buses halt at relatively few stops, passengers would have to travel longer distances to reach the bus stop. The shorter distance covered by passengers of ordinary buses make it more likely that they covered the distance by foot.
Public transport exclusion
The effect of income on the choice of bus is stark. For every 1 per cent increase in income, individuals have a 4.92 times higher probability of taking the Chalo bus (Annexure Table 1). It appears that passengers with higher incomes who commute long distances avoid trains, since they enjoy the option of availing of the premium Chalo bus, which offers much more comfort. This alternative to trains, however, does not benefit the working class, who too reside in suburban areas and the periphery of the Mumbai Metropolitan Region (MMR); they are compelled to travel in overcrowded buses and trains in the sweltering heat. In view of this, the relation between income and distance in our sample is even more pronounced. For every 1 per cent increase in income of the respondents, it is found that they travel 6.3 km more. This suggests that those with lower incomes have more restricted choices of employment and education.
Figure 2: Regression Line of Distance and Log of Monthly Income
Among ordinary passengers, 78.9 per cent reported that they could not find a seat and had to stand for the journey. By contrast, the Chalo app provides updates regarding seating on buses, adding a digital dimension to this exclusion. When respondents were asked if they found it reasonable to run premium buses in Mumbai, 70 per cent of ordinary bus passengers responded in the negative. Among Chalo bus passengers, unsurprisingly, only 1 per cent shared this view.
Alternative mode of travel
Among ordinary bus passengers who missed their bus, 32.2 per cent took the train and 34.4 per cent took the next bus. In effect, 66 per cent of ordinary bus passengers would wait for some form of public transport if they missed their bus. A smaller percentage, 26.7 per cent, would travel by auto-rickshaw instead, while only 6.7 per cent would use a cab or taxi.
Among Chalo bus passengers, however, a whopping 93.3 per cent reported taking a cab if they missed the bus. Only 3.3 per cent reported taking the next bus, 2.2 per cent reported taking an auto-rickshaw and 1.1 per cent reported taking the train. This shows that premium bus passengers can spend substantially more towards an expensive intermediate transport mode like a cab, on account of their higher incomes. (Another reason for Chalo passengers not waiting for the next bus could be the reported difficulties in rescheduling trips on the Chalo app.)
Figure 3: Alternative modal choice of ordinary bus commuters (in %)
We carried out a statistical exercise to examine factors influencing the choice of mode of travel. This shows that the higher the income group of a passenger, the less likely she/he is to wait for the next bus upon missing the bus3 (Annexure Table 2). Higher income group passengers are more likely to opt for cabs and auto-rickshaws. This underlines the need to focus on providing frequent and regular ordinary services for the majority of bus passengers, who are heavily dependent on these services, and lack other options.
Discussion
The drive for premiumisation
From the analysis above, many questions arise: Is the Chalo bus revolutionising urban transport? Is Chalo solving urban transport woes through its innovative digital solutions? Is the revenue model sustainable, in the sense of generating profits to keep public transport buses running?
In the past, BEST has embarked on adventures with premium services, deploying Mercedes buses. The tickets, though, cost the same as an ordinary air-conditioned bus. Between 2016 and 2020, BEST ran a premium service called MMRConnect, but it discontinued it without explanation. A comparison between Chalo bus and MMRConnect will enable a fuller understanding of what is different this time, and why, in fact, Chalo bus might have a life longer than its predecessor.
Map 1: Routes of Chalo Bus between September, 2023 and November, 2024
Source: Prepared by author based on ArcGIS base map
MMRConnect was introduced in 2016 by BEST and Mumbai Metropolitan Region Development Authority (MMRDA), as “a unique effort to provide convenience to the commuting corporate citizens of Mumbai’s Bandra-Kurla Complex …” (BEST, 2016). The aim was to connect the Bandra-Kurla Complex (BKC) with the distant suburbs, and decongest the main express highways in the city. At the time, these buses were touted as “state of the art competitively priced buses”. BKC was now connected to major corridors in Mumbai, Thane and Navi Mumbai. Additionally, under MMRConnect, BEST ran feeder services from Kurla (West), Sion and Bandra (East) railway stations to ease the commute for “office going crowds”.
Chalo bus was introduced in 2022 by Chalo Mobility Private Limited in partnership with BEST, without explicitly specifying which market segment it would cater to. Like MMRConnect, Chalo connects the major corridors in Mumbai, Thane and Navi Mumbai, in addition to shorter routes which coincide with tourist spots. It is noteworthy that the minimum fare of Chalo bus is equivalent to the maximum fare of non-AC ordinary buses under fares applicable till May, 2025. Thus, Chalo buses were explicitly priced out of the range of ordinary passengers.
Both Chalo bus and MMRConnect catered to those who could afford high fares. MMRConnect’s minimum fare was Rs. 16 (for 5 km), rising to a maximum of Rs. 110 (for over 20 km); the corresponding figures for Chalo are Rs. 25 and Rs. 275. Both came with the promise of air-conditioned, comfortable and fast transport in swanky buses for a narrow segment. Such services also claim to contribute to the efforts towards reducing congestion, especially its central business district, by way of attracting car users towards buses.
The timing of the introduction of both services, too, was similar: they were introduced when ordinary airconditioned buses of BEST were being phased out or scrapped.4 Instead of procuring new airconditioned buses, the BEST chose to introduce premium services which would be unaffordable to ordinary passengers. This is contrary to BEST’s stated mission, which is to provide public transport, in the public interest.
Figure 4: Passengers dangling from an ordinary bus at BKC
However, there is a key difference: MMRConnect buses were owned, operated, and maintained by BEST. Chalo buses are wholly owned, operated and maintained by Chalo Private Mobility Limited, a private firm. Unlike BEST’s ordinary wet-lease buses, Chalo has built a reputation in the city for comfortable travel with no breakdowns, indicating good maintenance of buses.
BEST procured a total of 25 buses for the MMRConnect service at a cost of Rs. 2.2 crore each (Rs. 55 crore in total). These were Tata Starbus Hybrid low floor 32-seater buses with fuel options of BS-IV diesel and electricity. At the time, it was indeed considered state of the art in terms of public transport.
Figure 5: Chalo bus passengers enjoy guaranteed seating
Under the agreement between Chalo and BEST, BEST will invest Rs. 50 lakh each for the first 100 electric buses. This investment would be over and above grants under the Central Government’s FAME-II scheme (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India Scheme Phase-II), which subsidises electric vehicles, and the Maharashtra Government Electric Vehicle Subsidy. BEST’s investment, however, would be paid back to BEST over time in the form of a payout percentage of net revenue each month.
As of June, 2024, Chalo operates a total of 144 premium buses. These include electric as well as BS-VI diesel buses. The electric buses it owns include Switch Mobility 12-metre buses with 42 seats and JBM 9-metre buses with 33 seats. It also operates Bharat-Benz 12-metre buses which run on BS-VI diesel and have 34 seats. If BEST had instead invested the same sum in ordinary CNG or diesel buses, such as were in its own fleet, it could have obtained double the carrying capacity (a standard 34-seater CNG/diesel bus costs around Rs 25 lakhs). Interestingly, BEST has made this investment on premium buses even as it resorts to wet-leasing of ordinary bus services, on the ground that it does not have to incur capital costs. Since Switch Mobility buses cost Rs. 1 crore and JBM 9-metre buses cost Rs. 1.5 crore, a Rs 50 lakh investment would have covered one-third of the cost of a JBM bus and half the cost of a Switch Mobility bus.
BEST has made a total investment of Rs. 50 crore towards Chalo buses. Thus, in all, between 2016 and 2024, BEST spent at least Rs. 105 crores towards the purchase of premium buses for the better-off. Such an investment reflects a bias in favour of the upper income commuters, and against ordinary bus commuters. In the case of Chalo buses, private operators would likely have availed of Central Government subsidies under the FAME-II scheme (40 per cent, up to a maximum of Rs 50 lakh) and the Maharashtra Government Electric Vehicle Subsidy (10 per cent). With the BEST funding an investment of Rs 50 lakh as well, the private operator’s own ‘skin in the game’ may be very low, potentially even zero. Thus Chalo buses may be said to epitomise the “ease of doing business” in India.
The buses under MMRConnect were operated by drivers and conductors on the payroll of BEST. On an average, a BEST driver earns around Rs. 40,000 a month while a conductor earns roughly the same. In the case of Chalo buses, there are no conductors, as tickets are booked only digitally. Drivers of these buses are employed by private contractors, subcontracted by Chalo. It is likely that the wages of Chalo drivers are in line with those of drivers of BEST’s wet-lease buses. A 2023 survey of BEST wet-lease drivers revealed that their salaries ranged from Rs. 15,500 to Rs. 22,700 a month, which is substantially less than what regular BEST drivers earn (Wayal and Chakma, 2023).
The revenue generated from buses operating under MMRConnect, including revenue arising out of advertisements on bus bodies, accrued to BEST. However, the revenue sharing arrangement of Chalo bus grants BEST a meagre 4 per cent of net profits. The break-up of this 4 per cent has been defined as the sum of a payout percentage of 1.5 per cent of net revenue and an additional payout percentage of 2.5 per cent in lieu of the investment made by BEST. Under this arrangement, Chalo is supposed to pay back BEST the initial investment (Rs. 50 lakh per electric bus) by way of the payout percentage. The possible remainder of the initial investment made by BEST will be “rolled over annually”, meaning no additional interest or tax would be imposed on it. All revenue earned from advertisements accrues to Chalo.
MMRConnect buses ran along the same routes as ordinary AC buses of BEST, which had much lower fares, and thus passengers could opt for the latter if they wished. By contrast, BEST has restricted the operation of ordinary AC buses along the same routes as Chalo buses, in order to ensure the success of Chalo. Giving Chalo a monopoly on these routes is particularly worrying, since Chalo also has the power to fix fares and rationalise routes without regulation from the state. Thus passengers who want air-conditioned travel along these routes must shell out substantially more money, while passengers who do not wish to pay more will now have to wait for ordinary non-AC buses, increasing the crowding in such buses. Route restrictions like this are more prominent in routes along tourist spots such as Bandstand and Juhu.
Revenue of Chalo Bus between June, 2023 and November, 2024
This section is based on the response to a Right to Information (RTI) application concerning the corporate revenue and route-wise performance of Chalo buses. While information for the former is available between June 2023 and October 2024, for the latter, information is available between September 2023 and October 2024 (BEST, 2025). The two sets of data points were provided in separate tables.
In the 17 months between June 2023, and October 2024, Chalo bus made a gross revenue of Rs. 2.64 core through corporate sources such as advertising revenue. After deduction of Goods and Services Tax (GST), the net revenue was Rs. 2.51 crore. None of this accrues to BEST. Between September, 2023 and November, 2024, Chalo reported a cumulative route-wise gross revenue of Rs. 20.3 core. In the same period, there was a total ridership of 23,03,413 passengers, with tickets costing an average of Rs. 88.2. From this revenue, however, BEST is expected to receive only a little over Rs. 81 lakh as part of the revenue sharing arrangement or even less given that the figures available are of gross revenue. These figures bring out the respective gains of the two sides.
Table 1: Revenue of Chalo bus between September, 2023 and November, 2024 (in million Rupees)
MonthNet Corporate RevenueGross Route-Wise RevenueShare of BESTJun-231.67
Jul-231.67
Aug-231.68
Sep-231.678.010.32Oct-231.689.630.39Nov-231.499.890.40Dec-231.4910.390.42Jan-241.3412.120.48Feb-241.1312.590.50Mar-241.3212.820.51Apr-241.4314.390.58May-241.4211.750.47Jun-241.4111.760.47Jul-241.4615.890.64Aug-241.4817.560.70Sep-241.4418.370.73Oct-241.4020.200.81Nov-24 17.780.71Total25.18203.168.13* Corporate revenue for November, 2024 not available ** Route-wise performance of June, July and August, 2023 is not available Source: RTI response of BEST
The agreement between Chalo and BEST is for a duration of 12 years, during which Chalo will be allowed to operate as many as 3,000 premium buses, if they wish. Keep in mind that at present, BEST has a cumulative fleet strength of 2,744 buses, of which nearly 91 per cent are wet-lease buses.
If we compare MMRConnect and Chalo, we find that while both exclude the majority of commuters through pricing, Chalo in addition excludes many commuters on the basis of digital access, as tickets are app-based only. Between MMRConnect and Chalo, the latter runs buses on more routes, with higher ridership. The fundamental commonality between the two is that the public transporter, BEST, has wilfully chosen to divert its limited resources towards premium buses catering to a minority of passengers, even as the majority of the working class using its ordinary buses are left in the lurch.
BEST’s decline: a choreographed crisis
The policy of introducing premium services should be seen in the light of the overall transport infrastructure policy of the authorities. Traditionally, Mumbai’s public transport has relied heavily on the suburban trains and BEST buses, meeting the requirements of major sections of the population such as the working class, the middle class/white collar employees, and students. BEST has operated routes of different lengths to cater to a variety of needs. However, in the past 15 years there has been a steady decline in its services.
From a peak of 4,700 buses in 2011 catering to the travel needs of over 42 lakh passengers daily, the fleet size of BEST has steadily declined, coming down to 2,744 buses in 2026 (Sen, 2023; Shaikh, 2026). The carrying capacity has declined more sharply, since the average seating capacity of the buses in the present fleet is considerably less than in 2011. This decline has had a direct influence on its ridership, as can be seen in Figure 6.
Figure 6: BEST ridership and fleet strength in select years
By 2019, steep rises in BEST’s fares and the decline in the frequency of services had led to declining ridership, citizen protests and unfavourable press publicity. In this situation, the BMC slashed fares drastically, from a minimum of Rs 8 up to just Rs 5 for 5 km, and an additional Rs 5 for each additional 5 km distance up to 20 km. (AC bus fares began at Rs 6 for the 5 km slab.) Within two days of rolling back the fare hike, ridership rose by 5 lakh while revenue declined by Rs. 67 lakh (Sen, 2019). Then, in 2025, BEST introduced a fare hike doubling the minimum fare to Rs. 10 for 5 km, with escalations for each additional 5 km. Within three months, daily ridership fell from 32 lakh to 25 lakh (Sen, 2025).
As fewer buses translate to lower frequency and trip cancellations, passengers have switched to other modes of transport. Trains are the cheapest, but do not offer last-mile connectivity. For the ‘last mile’, passengers have to switch to intermediate transport such as auto-rickshaws, whose base fare is Rs. 26, and bike-taxis, a form of gig work branded as cheaper mobility. Shared auto-rickshaws are now available at the same price as the minimum bus fare of Rs. 10. The non-provision of adequate bus services and concomitant shift to other modes, then, means the pockets of working class passengers get further pinched.
The class bias of state transport policy
The role of the state in facilitating the shift from public to private transport is instrumental as it has consistently directed public investments towards “big infrastructure” projects. BMC initially allocated Rs. 12,721 crore to the Coastal Road Project, which rose to around Rs. 14,000 crore by the time of opening its first phase to the public in January 2025 (Hindustan Times, 2024). Its second phase, which is in the pipeline, is estimated to cost around Rs. 16,621 crore, thus bringing the total cost of the project to over Rs. 30,000 crore. Another big infrastructure project in the region is the Mumbai Trans Harbour Link (MTHL), christened Atal Setu. Opened to the public in January 2024, the project cost a total of Rs. 17,843 crore. In a short span of time, Mumbai’s automobile owners are being showered with projects whose cumulative worth is over 47,000 crore. The number of users of the Coastal Road and Atal Setu have fallen far short of the projected figures, as Mumbai’s planning bodies lament the losses incurred. Similarly, large investments have been made in the different Metro projects of Mumbai, which are much more expensive than local trains or buses.
By contrast, by BMC’s admission, since 2012-13, when it started funding BEST, it has injected a total of Rs. 11,306 crores till January 2025 (BMC, 2025a). The gap between investments in big infrastructure projects aimed at upper income segments and public transport catering to the working class indicates brings out the class bias in public investment in transport.
One result of this class bias in investment is an exponential increase in the number of private vehicles. Mumbai’s vehicle density has risen alarmingly, from 1,150 per km of road network in 2014 to 1,840 in 2019 to 2,645 in 20255 (Transport Department, 2025; BMC, 2025b). Of the total of 53 lakh vehicles registered in Mumbai, at least 15 lakh vehicles are private cars and 31 lakh vehicles are two-wheelers (The Times of India, 2025). Buses accounted for only 0.73 per cent of total vehicles earlier in 2025 (Mid-day, 2025). Further, Mumbai’s local trains have a dangerous crush load of 14-16 persons per square metre, and recorded 2,287 deaths in 2025. (Kadam & Bandyopadhyay, 2020; Express News Service, 2026). Although the same figure for buses is not available, travelling in crowded public transport poses a major safety threat to millions of passengers daily.
Mumbai’s suburban trains have long had a small number of non-airconditioned first class sections. However, fully air-conditioned suburban trains, at fares much higher than general class and also higher than non-AC first class, have been introduced without increasing the total number of services. This implies the reduction of services to the vast majority of passengers. Ordinary passengers are subjected to longer waits and greater crowding, while those who have the means to afford air-conditioned services are able to reach their workplace on time and in relative comfort. The class divide thus pervades the different modes of Mumbai’s public transport.
Essentially, public transport policies in Mumbai have ensured the marginalisation of the working class and the privilege of the managerial class. Policy makers ignore the fact that the very offices of administration and finance, that their policies promote, are run on a daily basis by workers travelling by bus and suburban train – office boys, sanitation workers, pantry workers, drivers, security guards, domestic workers and daily-wage workers, without whose crucial and underpaid labour the city would certainly come to a standstill.
Destabilising BEST
In the name of making BEST commercially viable, state policy is compelling the undertaking to adopt the public-private partnership (PPP) model, by wet-leasing bus services and commercialising bus depot land. These policies in fact threaten the very existence of BEST. The wet lease operators have resorted to profiteering through cutting maintenance and underpaying workers (Aamchi Mumbai Aamchi BEST, 2024). Under the model, the crew – drivers and conductors – are on the payroll of private operators, or may be subcontracted. In return, BEST compensates the private operators on a monthly basis for a minimum of 160 kilometres run daily. BEST has boldly claimed that it has resulted in a 30 per cent cost reduction in its operations. However, a strict cost comparison reveals that the saving for BEST would be at best 5-6 per cent (RUPE, 2019). Meanwhile, as BEST has scrapped its own buses faster than it can draw down its own staff, drivers and conductors are left on BEST’s payroll without buses, thereby inflating the apparent costs of BEST-owned buses. Despite opposition from unions, BEST has deployed its drivers as conductors on wet-lease buses, on the basis of a High Court ruling (BEST Undertaking v. The BEST Workers’ Union, 2025). On BEST’s payroll, there were 6,337 drivers and 7,724 conductors in 2025 (Chitnis, 2025), whereas, on the payroll of different private operators, there were 5,242 drivers and 2,156 conductors. The situation will have changed by now, given that BEST has long stopped recruiting permanent employees.
Workers have resisted the “wet lease model”. In at least 16 strikes between 2019 and 2025, a common demand has been the rollback of wet-leasing. Over time, as wet-lease operators encompassed 91 per cent of BEST’s fleet, drivers working under these operators too joined the strikes asking for fair and timely renumeration. It has become common practice for private operators to not pay their workers on time. Further, a survey found that contractual drivers earn as low as Rs. 15,000 a month, insufficient to meet the needs of themselves and their families (Wayal & Chakma, 2023). They also do not enjoy social security benefits. Unlike drivers and conductors on the BEST payroll, they do not even get free travel on BEST buses while heading to depots to report for duty.
Wet-leasing has destabilised BEST services. Between 2019 and 2025, services of at least two private operators have been discontinued. MP Group and Hansa Group filed for bankruptcy in 2023 and 2024 respectively, complaining of delayed payments from BEST (Rs 90 crore in the case of Hansa Group). BEST in turn said that it had imposed penalties for their failure to fulfil the terms of the contract. This proves that the private operators from whom BEST has leased buses for its operations are not financially stable and thus not fit to run public transport buses. This resulted in MP Group and Hansa Group withdrawing 280 buses each from service, leaving passengers with fewer and overcrowded buses. BEST was unable to impose its will on them. Notably, both private operators ran the Force Traveller mini bus, which was touted to be a solution by BEST management in terms of cost cutting as well as traversing congested roads faster.
Further, frequent incidents of fire, especially on buses owned by Mateshwari Group, led to the withdrawal of 400 CNG buses for nearly a month in order to inspect these vehicles for safety (Rao, 2023). In fact, wet-leased buses account for 85 per cent of accidents between 2023 and 2025 (Rao, 2026). Accidents leading to deaths involving wet-leased buses also point towards drivers’ lack of training as well as fatigue, for both of which the private operators are responsible. Wet-leased buses are also marred by frequent breakdowns, pointing to the poor maintenance of buses. It seems that the private operators’ focus on cost cutting has made them lax regarding maintenance. The net effect of this is to undermine the safety and reliability of public transport for the people of Mumbai.
The wave of privatisation that has hit BEST is part and parcel of the current neoliberal orientation of policies. Loans from international development banks impose the public private partnership mode, even as evidence suggests that over 40 per cent of failed public private partnerships initiated under ADB-funded projects between 1991 and 2015 were in the transport sector (Lee et al., 2020).
BEST unions have initiated a “BEST Bachao” campaign to gather citizens to push for procurement of new buses owned by BEST in order to augment its dwindling fleet. The campaign has seen the support of civil society groups, transport activists, besides various unions. Unions stress that buses owned by BEST are well maintained in their workshops and are manned by experienced drivers. Simultaneously, frequent breakdowns of wet-lease buses and frequent incidents of reckless driving by the drivers of wet-lease buses add further weight to the demand for procuring BEST’s own buses, rather than running them on a wet-lease model.
Conclusion
We argue that Chalo buses are a part of a policy aimed at carving out a premium track within Mumbai’s transport infrastructure. Our survey finds that the mean incomes of Chalo bus commuters are 8 times those of ordinary bus commuters, and their daily expenditure on transport is more than 13 times that of the latter. The likelihood of using Chalo services rises steeply with income. Having access to more comfortable and swifter modes of transport, the premium segment is willing to travel over 2.5 times the distance of the ordinary bus commuters; thus working class sections get excluded from a range of choices in employment and education.
BEST has invested substantial sums to create premium services. The investments on premium services over 2016-24 could have procured over 400 ordinary CNG/diesel 34-seater buses for the majority of commuters, at a time when BEST has pleaded it does not have resources to procure buses of its own.
The case study of Chalo buses must be seen against the background of overall state policy with regard to public transport. The class bias of state policy is clear. This policy has prioritized the building of expensive road projects, Metros, airconditioned trains and premium buses, at the expense of the main modes of public transport used by the working class majority of the city, which are the suburban trains and ordinary buses. Public investment is geared toward road projects serving automobile owners. Large investments are made in Metro services, unaffordable to the majority of commuters. Within train services, ordinary services catering to the overwhelming majority are curtailed in favour of expensive airconditioned services. And finally, within bus services, a premium service is created to serve upper income segments, connecting them to corporate hubs. Ordinary non-AC bus services are discontinued on those routes to ensure a market for the premium buses, thereby reducing the number of buses available to the majority.
Meanwhile, BEST’s own bus operations are shut down and ordinary bus services are handed over to unreliable wet-lease operators. These are plagued by breakdowns, accidents, exploitation and mistreatment of workers and consequent workers’ strikes, bankruptcies and withdrawal of services. What has this meant for Mumbai’s working classes who depend on public transport for commuting? Much longer waiting times, crowded and cramped travel, and often diversion to other, more expensive modes, for lack of buses.
As mentioned earlier, proponents of premium services such as Chalo claim that such services will draw car owners to public transport, and thus reduce the number of vehicles on the road. However, the number of Chalo bus passengers is trivial compared to the number of private vehicles on the road. Given the policy of actively encouraging private vehicle use by massive investments in road infrastructure, the number of private vehicles has been rising and will continue to do so until effective disincentives are imposed. The impact of Chalo is felt more in the form of diversion of resources and routes away from public transport.
What explains the drive for premiumisation of transport, within the broader frame of planning for Mumbai? In the last 30 years, official policy has promoted a shift to Mumbai becoming a hub for top-tier services in finance and information technology (including AI), linked to the global economy. While these services require a range of low-paid workers in their day-to-day operations, they also employ a relatively well-paid white collar section who wish to travel in greater comfort. When international investors assess the infrastructure of different cities according to the requirements of their operations, one consideration is the transport options available to their staff. It appears that the city authorities have created options such as premium buses, Metros, and airconditioned suburban train services to address this requirement. The selection of Chalo routes, such as to the Bandra-Kurla Complex (a financial hub), and to the airport, is in line with this thinking. Premiumisation, then, can be seen as part of the Indian authorities’ efforts toward the “ease of doing business” for international investors, and thereby attracting investment. Apparently, the sharp deterioration in the services for the remaining population is not a concern for them.
Save the public character of public transport
Fare hikes in public transport are likely to push passengers towards private and intermediate transport such as autorickshaws and share-taxis, thereby increasing traffic congestion. In the absence of a commensurate rise in wages of workers, fare hikes only increase the share of income spent on travelling and reduce the share left for other needs.
Affordability is an inalienable principle of public transport. For private operators, the concerns of affordability of a public service are not as important because they seek to maximise profits. They have indeed been striving to maximise profits by reducing workers’ wages and ignoring regular maintenance of buses, leading to accidents and breakdowns. Such an operation hardly constitutes public transport for it is not operated in the interest of the public.
Public transport is not only meant to be used by the public but also should be owned by the public through the state, as this is the only way of ensuring that people’s interests are truly represented. Public transport is meant for the welfare of the public, and to ensure that their mobility is affordable and reliable. To privatise public transport wipes out this fundamental characteristic of public transport.
The other face of the privatisation of public transport is the rising number of private vehicles. Privatisation not only liquidates public assets, but also pushes people towards buying private cars and two-wheelers, thus benefitting auto sector manufacturers. At the same time, banks also greatly benefit as car loans rise. However, the increase in private vehicles increases pollution and traffic congestion, worsening the conditions of life for all citizens.
Public transport enables the mundane acts of getting to work, reaching school, running errands and engaging in social activity, by providing people the mobility they need. To restrict such acts by privatising public transport is nothing short of a systemic crime, and an effort to introduce new layers of exclusion to further fragment society. Public transport has also historically served as a means of interaction for people from different backgrounds. It has been a catalyst in breaking social divisions and bringing people together to understand each other’s problems. Despite being a public employer for the longest time, BEST has now turned its back on the very workers who ran it. It is this public character of public transport that stands threatened by privatisation.
Annexures
Binomial logistic regression was carried out to analyse factors influencing choice of Chalo bus:
(1)
Multinomial logistic regression has been used to examine the alternative mode of transport using:
(2)
(3)
(4)
Annexure Table 1: Binomial Logistic Regression Analysis representing factors influencing choice of bus (eq. 1)
Access to Smartphone ()-1.62338.142-0.0400.966Ability to Use Chalo App ()7.47612.6550.5900.555Income ()4.9221.3633.6100.000***Age1.5252.5130.6100.544Gender ()0.3351.3160.2500.799Distance (in km)
10-153.5772.0281.7600.07815-200.4492.0490.2200.826Over 204.2322.1431.9800.048**Intercept-67.05844.155-1.5200.129Likelihood Ratio Chi Squared229.55Log Likelihood-9.9939098Pseudo R-Square0.9199Note: *** shows significance of p-value at 1% confidence level (<0.01) and ** shows significance at 5% confidence level (<0.05) Source: Based on data from the field
Annexure Table 2: Result of Multinomial Logistic Regression for alternative modal choice (eq. 2,3,4)
Alternative Mode of Transport CoefficientStd. ErrorzP>zAuto-rickshawAbility to perform digital transactions ()-1.5821.388-1.1400.254Income ()-2.0350.565-3.6000.000***Age0.5821.2290.4700.636Gender ()-1.3280.811-1.6400.102Distance (in km)
TrainAbility to perform digital transactions ()-1.6761.364-1.2300.219Income ()-2.7440.587-4.6800.000***Age0.9821.1960.8200.412Gender ()-2.1180.890-2.3800.017**Distance (in km)
10-15-0.2041.123-0.1800.85615-200.9971.3020.7700.444>200.0370.9480.0400.969Intercept4.6194.7720.9700.333Next BusAbility to perform digital transactions ()-1.4171.323-1.0700.284Income ()-3.3270.658-5.0600.000***Age1.4431.2571.1500.251Gender ()-0.5680.803-0.7100.479Distance (in km)
10-150.0851.0510.0800.93515-20-14.262884.219-0.0200.987>20-0.8881.041-0.8500.394Intercept3.7094.9580.7500.454Likelihood Ratio Chi-Squared201.76
Log Likelihood-122.22492
Pseudo R Square0.4522
Note: *** shows significance of p-value at 1% confidence level (<0.01) and ** shows significance at 5% confidence level (<0.05) Source: Based on data from the fieldReferences
Cheranchery, M. F., Raji, P. M., Surendran, S., Navab, N., Nath, A. S., & Padu, K. (2020). Are the preferences of travelers same across cities? A tale of two Indian cities. 491. IOP Conf. Series: Earth and Environmental Science. https://doi.org/10.1088/1755-1315/491/1/012053
Datta, A., & Shaban, A. (2016). Mega-Urbanization in the Global South: Fast Cities and New Urban Utopias of the Postcolonial State (1st Edition ed.). Routledge. https://doi.org/10.4324/9781315797830
Kadam, S., & Bandyopadhyay, P. K. (2020, June). Modelling passenger interaction process (PIP) framework using ISM and MICMAC approach. Journal of Rail Transport Planning & Management, 14. https://doi.org/10.1016/j.jrtpm.2019.100171
Lee, M., Han, X., Quising, P. F., & Villaruel, M. L. (2020). Hazard analysis on public-private partnership projects in developing Asia. Journal of Infrastructure Policy and Development, 4(1), 50-72. https://doi.org/10.24294/jipd.v4i1.1165
Maunder, D., & Mbara, T. (1996). Liberalisation of Urban Public Transport Services: What are the Implications? Indian Journal of Transport Management, 20(2). Retrieved from https://trid.trb.org/view/483377
Arish is a student of history and development studies. His research interests include urbanisation and public transport. ︎
Under a gross cost contract, buses are owned, operated and maintained by a private operator selected through a tender. While ticket revenue accrues to BEST, the operator is paid by the kilometre and assured a minimum payment. BEST used to deploy its own conductors on wet-lease buses earlier but recently, conductors, like drivers, have also been subcontracted. ︎
We carried out a multinomial logistic regression with cabs as the reference category. Cabs have been considered the reference category on account of a high proportion of the sample opting for them. Separate multinomial logistic regressions with auto-rickshaws and trains as reference categories also lead to the same inference. ︎
MMRConnect was introduced in 2016, at a time when the ordinary air-conditioned Cerita buses, procured in 2009-10, were breaking down well before the end of their lifespan. Chalo bus were introduced at a time when other ordinary non-AC buses procured under the JnNURM were nearing the end of their lifespan of 15 years. ︎
Length of road network considered is 1941.41 km, as per BMC. ︎
For the second time in less than a year, a ceasefire has been called on a genocide being carried out by imperialism. And for the second time, there is much debate about the decision by the resistance leadership to agree to such a ceasefire and negotiations. We believe the evaluation of any such decision should […]
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For the second time in less than a year, a ceasefire has been called on a genocide being carried out by imperialism. And for the second time, there is much debate about the decision by the resistance leadership to agree to such a ceasefire and negotiations.
We believe the evaluation of any such decision should be made principally by the Iranian people themselves, and they are perfectly capable of forming their will and acting upon it. Those who support Iran from afar should ensure that the expression of their opinions does not interfere with that internal process.
For now, what is evident and important is that US imperialism has failed in its principal war aim, which was not merely to kill Iranians or destroy military and civilian infrastructure, but to subjugate Iran. Not only has it failed to do so, but on the contrary Iran has demonstrated its capacity to endure the most terrible assaults and overcome attempts at subjugation; and that capacity remains basically intact in case US imperialism ventures to try again. That in itself is a historic victory by Iran, one which will reverberate profoundly across the world, particularly among Third World countries.
At the same time, it is clear that neither has the basic character of either the US or Israel changed, nor have they abandoned their long-term aims, nor have they lost all their strength. They will keep trying to find other ways to achieve their aims, and may even resort to worse horrors. As such, for anyone to take this to be a final victory would also be a delusion. What the Gaza and Iran ceasefires signify is that the struggle against imperialism must yet go through many twists and turns and cunning passages. And so people must be prepared for even grimmer struggles to come.
For now, we must grasp the nature of this victory, however partial and qualified.
How has Iran continued to resist?
If the outcome of wars were decided by the stockpile and sophistication of weapons alone, the US-Israeli war on Iran should have been over on March 1 itself, so great is the imbalance of equipment and resources between the two sides. Two weeks into the aggression, US Secretary of War Pete Hegseth announced to the press that “Iran has no air defenses. Iran has no air force. Iran has no Navy….” He exulted:
We said it would not be a fair fight and it has not been…. [T]he combination of the world’s two most powerful air forces is unprecedented and unbeatable. Between our Air Force and that of the Israelis, over 15,000 enemy targets have been struck. That’s well over 1,000 a day.1
Iran has fought this war virtually on its own (its main assistance has come from its even more embattled resistance allies in the region), and largely with its own weaponry.2 Iran is a Third World country, labouring under harsh imperialist sanctions for decades. It is now facing aggression by an imperialist superpower along with the region’s most technologically advanced military power. How has it continued to resist? What is Iran’s military strategy?
The facts we cite below are widely reported. However, certain political implications of these facts may have been missed, in particular, the role of the Iranian people.
Iran’s strategy of defence, and its implications
The US and Israel have not yet put soldiers on the ground; the aggression on Iran has been waged from the air, largely by missiles.3 Since Iran lacks missile defence, i.e., interceptors which knock out incoming missiles, its enemies could fire missiles at it at will, constrained only by the quantum of weapons at their disposal.4
Iran’s only ‘defence’ against these incoming missiles has been its counter-attack, in the form of missiles and drones, and more than a month of intense US-Israeli bombing has not succeeded in destroying that capability. By imposing an economic and political price on its adversaries, and by knocking out critical military infrastructure of the US in the region, Iran has aimed to eventually stop the aggression.
In the meantime, however, the US and Israel have already slaughtered civilians and bombed hospitals, pharmaceutical factories, universities, schools and bridges, attempting to reverse the development of Iran’s economy and society to a primitive level (to the “Stone Age”, in Trump’s words). The Iranian government must have taken this into account, and it must have been prepared for a large death toll of its own civilians. We shall return to the significance of this point later.
Missile deployment for a protracted defensive war
Facing missile attacks by a West-backed Iraq in the war of 1980-88, Iran acquired a few Scud missiles from Libya and North Korea and set about reverse-engineering them. It now has an impressive range of missiles of different ranges, and in the last decade it has given priority to improving the precision of their targeting.5
Harking back to forces elsewhere in the world that have successfully challenged US imperialism over the decades, Iran has dug its shelters deep into the earth. Its missiles are stored in tunnels spread throughout the country over dozens of underground bases, at depths unreachable by US and Israeli munitions – “proof that Iran has been preparing for a war like this for years and possibly decades.”6The missiles are taken out on mobile missile launchers, fired, and the launchers are hidden back in the mountain. CNN claims that there are dozens of such underground bases.
The US and Israel have been monitoring these sites and, says Hegseth, “we’re hunting them down.” Thus, five days into the war, the Wall Street Journal declared that Iran’s strategy was “beginning to look like a blunder”, since US and Israeli war planes were bombing the entrances, entombing the weapons below ground. “We’re hunting Iran’s last remaining ballistic missile launchers to eliminate what I would characterize as their lingering ballistic missile capability,” said Adm. Brad Cooper, the top US commander in the Middle East.7 The US claimed that a reduction in daily Iranian missile launches was proof that they had put most sites out of action.
However, almost a month after Cooper’s boast, Iran was launching 10-20 missiles at Israel alone per day, and their strike rate was improving. The reduction in launches per day was part of a well-planned switching of gears: Iran was (and is) fighting a more protracted war, in which it maintains a steady stream of launches for a long period.8 Moreover, the tunnel entrances hit by US bombing appear to have been only temporarily affected, and were either re-excavated within days or used alternative entrances. And many of the US’s apparently successful strikes may have been wasted on the numerous decoys planted by Iran.9
The “poor man’s cruise missile”
Even more remarkable is the story of Iran’s humble drones. These testify to Iran’s resourcefulness in the course of four decades under constant threat of aggression by US imperialism and its partners in the region, and in the face of pervasive sanctions. The International Institute for Strategic Studies says, without intending irony: “Tehran has also benefitted from being able to examine a number of other nations’ UAV designs, mainly those of the US, that it has had access to as a result of losses either due to technical problems or hostile action.”10
Iran’s Shahed drones seem toys by the standards of the US and Israeli weapons: 8 feet wide and 12 feet long, the Shaheds carry 30-50 kg warheads, and their top speed is just 115 miles per hour. By comparison, the world’s first cruise missile, the German V-1 rocket of 1944 during World War II, carried an 850 kg warhead with a maximum speed of 400 miles per hour. The speed of the Shahed drones is comparable to World War I planes. There is, of course, a huge difference in the precision of targeting.
The Shaheds are an example of what used to be called, in development economics of the 1960s and 70s, ‘appropriate technology’:
— they are simple and cheap to manufacture;
— their manufacturing lead times (i.e., from start to finish of the production process) are short;
— they can be fashioned out of cheap, off-the-shelf commercial components used in civilian equipment, the imports of which are difficult to track;
— they can be manufactured in any number of small workshops located throughout the country;
— they can be moved in the bed of a large pick-up truck, making them difficult to detect;
— and they can be launched from a rail-based rack off the back of a commercial-grade truck. They can thus be produced in large numbers, moved to any location, and fired. “The problem with a technology like that is it’s become democratized,” says Maximilian Bremer a former chief of the Advanced Programs Division at the U.S. Air Force’s Air Mobility Command.11
It seems the US has no idea how many drones Iran has: “Estimates… vary widely – from thousands to tens of thousands.”12 Since drones can be produced in such large numbers, they can be used to swarm and overburden aerial defenses. Each intercepted drone too plays a role, by exhausting the interceptors of the adversary.
Military analysts refer to drones, quite appropriately, as the “poor man’s cruise missile.”13 Iran’s drones cost $20,000-50,000 each; the US and Gulf nations have been shooting these down with Patriot missiles that cost $4 million each, Terminal High Altitude Area Defense (THAAD) missiles that cost $12.8 million each, and ship-based ballistic missile interceptors that cost between $10 million and $28 million each.14
Using fighter jets to down drones may be even more expensive: London’s Financial Times reports: “Advanced fighter jets have been mobilised across the Gulf this month to hunt down enemies they were never designed to fight: waves of slow-moving and low-flying attack drones fired by Iran.”15 It costs more than $25,000 an hour to keep a single F-16 fighter in the air. The F-16, optimised for combat at 445-1186 miles per hour, “must slow down almost to stall speed to deal with the puttering low-tech machines.”16 It then shoots down the drone with munitions which may cost $500,000-$1 million each.
While the US government is reluctant to discuss how much it has spent so far, its Department of War asked Congress for another $200 bn in funding for the war. War Secretary Pete Hegseth said that the figure “could move” – “It takes money to kill bad guys”.17
Critical damage inflicted by drones
Iran’s strategists made two simple but startling calculations which the Pentagon appears to have missed. These are brought out in a note by J.P. Morgan, the US investment bank: “While drone payloads are much smaller [than missile payloads], (a) it only takes small payloads to cause tremendous damage to much more expensive aircraft, ships and radar systems, and (b) drones carry more payload per unit cost than many missile systems.”18
The implications of this can be seen in the results achieved. Iran has launched over 3,000 drones since it was attacked by Israel and the US on February 28, most at targets in the Gulf. While the majority of them have been intercepted, “some have got through to hit military bases, energy installations and civilian infrastructure, sometimes with remarkable precision.”19
The drones that got through destroyed or put out of action (among other things) critical air-defence and satellite communication systems. The BBC says: “Radar and satellite systems have been a focus [of Iran’s missile and drone strikes] from the start… They function as the eyes and ears of modern military operations.” Without those eyes and ears, missile defence systems cannot function. Indeed, so extensive was the damage to US radar in places such as Bahrain, Kuwait, Saudi Arabia, UAE and Jordan that the US was forced to haul in missile defence systems from South Korea.20
While the US military reported having nearly 40,000 troops in the region when the war started, it has had to disperse thousands of them due to Iran’s retaliatory strikes. The significance of this needs to be grasped. As the New York Times points out, US military bases in the region have been built up over a long period, and in particular during the invasion of Iraq; “Now, the war in Iran has made all of those bases vulnerable — to the point where service members can’t really live or work there for extended periods…. Many of the 13 military bases in the region used by American troops are all but uninhabitable, with the ones in Kuwait, which is next door to Iran, suffering perhaps the most damage.”21
Among the hits: a US Army tactical operations centre in Port Shuaiba (Kuwait); Ali Al Salem Air Base, Kuwait; Camp Buehring, Kuwait; Al Udeid Air Base, Qatar, the regional air headquarters of U.S. Central Command; the headquarters of the U.S. Fifth Fleet in Bahrain; and the Prince Sultan Air Base, Saudi Arabia. Iran’s March 27 attack on the Prince Sultan base knocked out the critical Airborne Warning and Control Systems (AWACS) E-3 plane – this loss, say top experts, is “incredibly problematic, given how crucial these battle managers are” to all operations.22
As a result, while retaining on location pilots and crews directly needed for missions and maintenance, the US has evacuated much of the land-based military, some as far away as Europe, some to hotels and other civilian locations in the region. In effect, as Iran has pointed out, the US is using civilians of the region as human shields. Iran has urged people to report these new locations as it hunts for the concealed US troops, and it has issued a warning to hotel owners in the region that hosting US military personnel could make their properties legitimate military targets.
Iran’s second navy
At the start of this war Iran had two navies. One was a conventional navy, the Artesh navy, consisting of larger surface ships and two large submarines, operating in the Persian Gulf and Arabian Sea. These have proved sitting ducks for US and Israeli strikes, and were either sunk or put out of action within days.
The second was a ‘mosquito fleet’ – the navy of the Iranian Revolutionary Guard Corps. This has largely survived the bombing. It is entirely different from the regular navy: It consists of large numbers of cheap vehicles and weapons, which can operate in swarms, saturating the defences of larger vessels. These include hundreds of armed speedboats, nearly two dozen midget submarines, numerous uncrewed surface vehicles (USVs) and uncrewed underwater vehicles (UUVs), thousands of naval mines, and swimmer delivery vehicles.
All these are tailor-made for the Gulf’s geography and the conditions of the Strait, which Iran has spent decades studying and training its personnel to operate in. These vessels/vehicles can operate in waters as shallow as 30 metres, take advantage of the noisy environment to avoid sonar detection, and harry the enemy. They are supported from the coast by truck-mounted missiles and drones, hidden in bunkers and tunnels within mountains adjacent to the Strait. “The IRGCN’s entire doctrine, training, and equipment procurement were optimized for exactly one scenario, that of denying the Strait of Hormuz to a technologically superior adversary. That is the war Iran is now fighting.”23
This strange fleet was created by the strenuous yet patient efforts of Iran over long years under sanctions. It managed to acquire a superfast British speedboat, dismantle and reverse-engineer it to produce hundreds of armed speedboats; it spun this knowledge off to make an unmanned suicide speedboat to ram into enemy vessels; it used the know-how it gathered making aerial drones to make its own underwater drones (UUVs); and it imported a North Korean midget submarine and reverse-engineered it to produce nearly two dozen. All of these were done at low cost, enabling their production in large numbers. (To take one example, the US’s Ohio class submarine is 6 times as long, weighs 150 times as much, and costs 180 times as much, as an Iranian midget sub. Yet it would be a sitting duck in the Strait of Hormuz.)
On the ground
As we mentioned at the outset, the US and Israel have not yet attempted a ground invasion. This is despite the fact that they cannot get control of Iran (‘regime change’) without a ground invasion. The reason for the US-Israeli hesitation is clear: in a country in which the people are prepared to resist, invaders on the ground are at a severe disadvantage, as the US has learned in Vietnam and elsewhere, and Israel has learned in Gaza. The people of Iran are not waiting for US and Israeli troops with garlands. Rather, it is credibly reported that 14 million Iranians have volunteered to fight to the death for the defence of their country. At that point all the lessons of guerrilla warfare will apply with even greater force.
Even landing a major expeditionary force in Iran would present challenges, let alone occupying the country. While Iran has little or no missile defences, its air defences demonstrated their effectiveness by shooting down a US A-10 aircraft (designed to provide close air support to ground troops), two C-130 transport aircraft, two Black Hawk helicopters, and even an F-15 fighter aircraft.
When the US invaded Iraq on March 20, 2003, it faced a traditional standing army with centralised command, led by a general staff at the top. In 22 days US forces reached Baghdad. By that point the Iraqi army had crumbled, for a number of reasons, among them the possible buying-off of some top Iraqi officers. Once the US captured Baghdad and other major cities, the war was over.
The structure of Iran’s armed forces is entirely different, and will pose different challenges to any invasion.
Iran’s mosaic defence
The structure of the Iranian State today is a legacy of the 1979 Revolution. That historic event overthrew the Shah, a US puppet, and thus permanently pitted Iran against US imperialism. The Revolution also had an impact on Iran’s social order, but it did not overturn it, and class divisions have remained and reproduced themselves over the years.
Iran’s armed forces consist of two parallel forces, the 420,000-strong traditional army (Artesh) and the 190,000-strong Islamic Revolutionary Guard Corps (IRGC). In theory, the Artesh is to defend the country’s territory while the IRGC is to defend the Islamic Revolution itself. Thus the IRGC is given greater ideological education and motivation. The IRGC is also in charge of the militia, the 450,000-strong Basij. The Artesh and the IRGC each have their own ground forces, air force, and navy. However, all these forces come under the command of the Armed Forces General Staff and Central Headquarters, and ultimately the Supreme Leader.
Keenly aware of US imperialism’s longstanding plan to decapitate Iran’s leadership and seize power, Iran devised a ‘mosaic’ defence strategy, namely, “a multitude of autonomous tactical cells deployed across different sectors, capable of acting independently while remaining guided by pre-established strategic directives.”24 The IRGC units in each region/province can call upon the regional Basij forces during times of crisis. Each unit has its own military, including intelligence capabilities, weapons, and command-and-control.
What seems to be an inefficiency – extensive duplication of resources – is necessary in Iran, in conditions in which the central leadership is vulnerable to attacks. By building in redundancy at every level (multiple actors performing the same function), the system ensures that decapitation at the centre does not immobilise the regions. This has been proven in practice, with the US assassinating the Iranian leadership on the very first day of the war, and continuing to assassinate top leaders thereafter, with hardly any effect on Iran’s capacity to fight.
Underlying principles
This is a remarkable achievement, for which it is difficult to find a historical precedent. However, while Iran’s strategy has many new features, it unmistakably draws on certain longstanding principles of guerrilla war and protracted war. These are principles whereby a smaller and more backward military force that enjoys the support of the people can, over time, overcome a larger and more advanced military force. It is unusual to see a State power with a standing army drawing on this body of military thinking, which has in the main guided various liberation forces worldwide .
Going by these principles, a smaller and militarily backward force chooses to engage with the enemy not in the manner, time and location chosen by the enemy, but fights in its own way, at a time and place of its choosing, when it is in an advantageous tactical position. It combines decentralised command in specific campaigns and battles with centralised strategic command; ensures the self-reliant capability of the armed forces, arming them and the people with available weapons; and uses these weapons in a way that minimises its own disadvantages and exploits the weaknesses of the enemy.
Behind this is the understanding that weapons do not decide everything in war. While they are an important factor, in the final analysis people, not things, are decisive. In the course of a protracted war, there is scope for the weaker military force to change the balance of strengths of the two sides, without prematurely seeking decisive engagements. How long that course might be partly depends on a number of objective national and international conditions, but success is ultimately decided by the actual leadership in the war, and whether it is able to draw on its strengths to overcome its disadvantages.
Just as weapons do not decide everything in war, nor does geography. The mere geography of the Hormuz Strait did not in itself provide Iran a trump card, as some commentators seem to think. In order to exploit this geographical feature, Iran required a certain outlook, an outlook of self-reliance and resistance to imperialism.
Some commentators now conclude that Iran, by effectively resisting the combined assault of the US and Israel, has emerged as a major military power on the world stage. This misses the point. Iran’s military strengths, as we have described them above, are not fitted for exercising domination abroad, but for defending themselves at home, in alliance with other resistance forces in the region. The political character of this force is essentially different from the forces of aggression led by its adversaries, the US and Israel.
No doubt, 40 days is not a protracted war; but Iran has shown its readiness to fight such a war, and consequently the signs of a progressive shift in the balance of forces in favour of Iran have emerged. It is to pre-empt the fuller unfolding of this process, which would shift the balance further and further, that the US has decided to negotiate. As such, even this 40-day war can be taken as an illustration of the concept of a protracted war.
Whether or not anything emerges from the current negotiations, it is certain that the US and Israel will not change their character or basic drive. Nor have they permanently lost the capacity to attack. They will certainly keep on making trouble, even if they keep failing; equally, we can expect the people of this region to keep struggling, again and again, till their victory.
The shaping of people’s consciousness
As we stated at the outset, this strategy requires the people to undertake great sacrifices. There is no way of stopping the US and Israel from firing missiles at Iran, slaughtering people, wiping out schools, universities, hospitals, pharmaceutical factories, bridges, power plants, water treatment plants, indeed all the prerequisites of a civilised existence. Iran can only retaliate, not prevent, and its retaliation will necessarily claim a much, much smaller toll, in numbers, than the sacrifice of its own people. This has been the case in every war waged by an oppressed nation against an imperialist power. In Vietnam, which the US to this days views as causing a great loss of life of its own soldiers, the ratio of deaths was perhaps 60 Vietnamese to 1 US soldier. Yet Vietnam finally liberated itself from US imperialist rule.
In the case of Iran, it should be remembered that the status quo before the war was an intolerable one, whose effects on people’s lives over decades were comparable to that of a war. A widely-cited study by the leading medical journal Lancet in 2025 found that international sanctions, principally unilateral sanctions imposed by the US, led to over half a million deaths a year worldwide, “a death toll similar to that of wars.”25 This must certainly be the case for Iran.
We get an idea of the impact of sanctions by looking at the period since 2018, when the US re-imposed sanctions on Iran (after a few years of partial relief). The 2022 report of the UN Special Rapporteur on the impact of renewed sanctions on Iran during the preceding four years makes for harrowing reading.26 Foreign exchange earnings fell 62 per cent, the price of health care rose 67 per cent, the price of the food basket rose more than 300 per cent, and the official poverty rate rose by 11 per cent.
But more than these dry figures, the sheer targeted sadism and perversity of the sanctions is brought out by other facts: the blocking of essential equipment such as ambulances, medical equipment (including ventilators and CT scans during Covid), over 130 essential drugs for various diseases, even the software required for the management of the dosage of medications for patients of cancer and other diseases. Where 10 million doses were needed for the treatment of thalassemia patients, Iran was only able to obtain 1.5 million doses, leading to a quadrupling in mortality from the disease. A particularly grotesque instance concerns the medicines for the treatment of Iranian war veterans and civilians who survived nerve agent and mustard gas attacks during the war with Iraq in the 1980s. It was the US that had egged on Iraq to invade Iran; it provided Iraq with the materials and financial support for manufacturing various chemical weapons; it drew up plans for their actual use by Iraq on Iran; it made preparations for protecting its own forces after the anticipated use of these weapons.27 All this was done as part of its overall (continuing) project of ousting the post-Revolution government in Iran. Now the US blocks the medical treatment of the Iranian victims of those ghastly war crimes.
Not only the effect of sanctions on the health sector, but their effect on all sectors of the economy takes a toll in lives and in the quality of people’s lives, comparable to the toll of a war. Thus when the Iranian leadership and its people weigh the price of the current war against their condition before the war, they are not deterred by the current challenges.
The sanctions are only one manifestation, albeit a glaring one, of imperialist domination in the region. Beyond the narrow calculus of lives lost due to sanctions, the Iranian people would now be motivated by their realisation of the need for a great struggle against imperialism. That embraces the Palestinian struggle for liberation, the struggle of the Lebanese people in defence of their sovereignty, and many other similar bitter struggles in this region and elsewhere. This is reflected over and over in the expressions of the people on the streets. They express readiness for great sacrifices to remove the yoke of US imperialism on them. They have, in a sense, nothing to lose by resisting, and everything to gain.
The subjective forces
Thus, contrary to western media notions that the Iranians are itching to oust the present government and install the former Shah’s son, the Iranian strategy of a protracted war is predicated on the support of the masses of Iranian people. Without such support, the assassination of virtually all of Iran’s top leadership by the US and Israeli armed forces could have had unpredictable consequences.
Instead the succession (in some cases more than one such, as the next rung too were assassinated) took place quickly and effectively, and was endorsed by vast rallies of people who have been coming on the streets throughout the country, day after day, in the face of the missiles. This reflects the consciousness of the Iranian people of the need to fight US imperialism unconditionally and uncompromisingly. They support their government precisely because it is fighting US imperialism, and to the extent it continues to do so. In the face of Trump’s threat to wipe out Iranian civilisation itself, masses of people turned out to form human chains around the country’s power projects, bridges, and other infrastructure – a historic event, one worthy of the admiration of the world people.
By mobilising the Iranian people in support of its resistance, the Iranian government has also set in motion a political process with potentially profound consequences. Now the Iranian State is more dependent on their support, and they in turn manifest greater political assertion and ownership of it. In this context, the speech of the present Supreme Leader, Mojtaba Khamenei, on April 10, the 40th day of his father’s martyrdom, and the scheduled start of negotiations in Islamabad, is of great significance:
“Today… it can be said that you, the heroic Iranian nation, are the definitive victors…. Your cries in the streets are effective in the outcome of the negotiations. What is essential is the continued presence of the people, just as in the past forty days. This presence is a pillar of Iran’s current strength. Even if negotiations begin, public presence must not diminish. The voices of the people influence negotiations.”28 (emphases added)
A thoroughgoing fight against imperialism requires the democratic participation of the masses; and once in the field, the people have the potential to mould and re-mould their society and world in all respects.
There are reports that Russia has provided Iran assistance in targeting missiles and drones, but these are attributed to unnamed sources. What is confirmed is that Iran is one of three countries in the region (along with Pakistan and Saudi Arabia) with full military access to China’s satellite navigation system, BeiDou, and this could have helped in targeting missiles and drones. However, Iran does not appear to be using Russian or Chinese weaponry. China stopped export of weapons to Iran in 2015, and has no formal defence ties with the latter. While Iran has imported dual-use commodities (i.e., items with both military and civilian uses, such as electronic components and drones) from China, so too have many other countries in the region, including Israel. “Given China’s extensive economic interests across the Middle East, Beijing balances its support for Iran with other critical trade and investment partners in the region. In 2025, China registered $108 billion in two-way trade with Saudi Arabia and $108 billion with the UAE, compared to $41.2 billion with Iran (including unreported oil imports). Arab Gulf countries also present far greater investment, technology, and market access opportunities for Chinese companies than Iran.” China-Iran Fact Sheet: A Short Primer on the Relationship, March 16, 2026, US-China Economic and Security Review Commission, https://www.uscc.gov/research/china-iran-fact-sheet-short-primer-relationship US intelligence sources now (April 11) report that China is intending to supply Iran with weapons, but the Chinese have denied this report. ︎
Except briefly, in a disastrously botched operation at Isfahan. ︎
In the run-up to the war, some media outlets speculated that Russia had supplied Iran with its S-400 missile defence, but there is no evidence of that in the present conflict. ︎
The International Institute for Strategic Studies (IISS), Open-Source Analysis of Iran’s Missile and UAV Capabilities and Proliferation, April 2021. ︎
Julian E. Barnes and Eric Schmitt, “Iran Is Quickly Repairing Missile Bunkers, U.S. Intelligence Says”, New York Times, April 3, 2026. A CNN examination of satellite images of 27 underground bases found that 77 per cent of the tunnel entrances had been hit by US-Israeli bombing, but within 48 hours, the Iranians had begun digging to re-open them. The US “ The [US-Israeli] combined force has struck the Yazd Missile Base at least five times since the beginning of the war. The repeated targeting of the Yazd Missile Base, as well as other Iranian missile bases, suggests that there are entrances and exits to these bases that the combined force has not struck.” Haley Britzky, Natasha Bernard, Jim Sciutto and Tal Shalev, “Exclusive: US intelligence assesses Iran maintains significant missile launching capability, sources say”, https://edition.cnn.com/2026/04/02/politics/iran-missiles-us-military-strikes-trump︎
Nicholas Kulish, “In Iran War, Cheap Drones Remain Wild Card”, New York Times, March 25, 2026. ︎
Dylan Butts, “Iran’s Shahed drone: How ‘the poor man’s cruise missile’ is shaping Tehran’s retaliation”, CNBC, March 5, 2026. ︎
Tanner Stening and Cyrus Moulton, “As US-Israel war in Iran enters fourth week, costs of conflict come into focus, experts say”, Northeastern Global News, March 23, 2026. ︎
Jacob Judah, “Military briefing: The high cost of using fighters to down Iranian drones”, Financial Times, March 23, 2026. ︎
Francisco Rodríguez, Silvio Rendón, Mark Weisbrot, “Effects of international sanctions on age-specific mortality: a cross-national panel data analysis”, Lancet, August 2025. ︎
Report of the Special Rapporteur on the negative impact of unilateral coercive measures on the enjoyment of human rights, Alena Douhan, on her visit to the Islamic Republic of Iran, October 2022. ︎
See U.S. Senate Committee on Banking, Housing and Urban Affairs, Report on U.S. Chemical and Biological Warfare-Related Dual-Use Exports to Iraq and The Possible Impact on the Health Consequences of the War, 1994, at https://web.archive.org/web/20160627034656/http://www.gulfwarvets.com/arison/banking.htm, and numerous other documents. The US Senate took up this question from the narrow perspective of its own soldiers having been exposed to these chemicals during their invasion of Iraq in 1991; nevertheless these documents bear out the facts cited above. ︎
Below are some of the recent translations of RUPE blog articles. We are aware of the work involved in translation, and thank all the translators for helping reach these articles to more readers. Marathi “The War on Iran, and India” has been translated into Marathi by Rashmi Divekar. The pdf is attached here. Turkish “Behind […]
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Below are some of the recent translations of RUPE blog articles. We are aware of the work involved in translation, and thank all the translators for helping reach these articles to more readers.
— Jacob Levich Recently I wrote of an aggressive new form of imperialism by which the Trump administration means to thrust American nuclear technology, primarily nuclear power plants (NPPs), on allied and subordinate nations. It’s worth taking a closer look at the scope and significance of this programme, since it threatens to destabilize nuclear safety […]
Recently I wrote of an aggressive new form of imperialism by which the Trump administration means to thrust American nuclear technology, primarily nuclear power plants (NPPs), on allied and subordinate nations. It’s worth taking a closer look at the scope and significance of this programme, since it threatens to destabilize nuclear safety worldwide.
So-called “123 Agreements,” named for Section 123 of the U.S. Atomic Energy Act of 1954, are already in force in more than 50 countries. Originally the U.S. intended these bilateral deals to curb nuclear proliferation. A recent spate of agreements, however, is specifically designed to remove impediments to the export of U.S.-made NPPs.
Already in Trump’s second term, pacts of this kind have been executed with the U.K., Poland, Slovakia, Thailand, Philippines, Singapore, Bahrain, and Saudi Arabia. Many more are in the pipeline, primarily in Europe and Asia.
In keeping with Trump’s vow to expand civil nuclear power around the world, the atomic empire is now elbowing its way also into Africa, where Ghana has contracted with U.S.-based companies NuScale and Regnum Technology Group to build and install an NPP capable of generating 720 MW. And that is just the beginning. According to a U.S. official: “Where Ghana goes, the others on the continent will follow.”
Everywhere the comprador classes, certain to skim off healthy profits from such deals, are heaping lavish praise on the coming “nuclear renaissance,” said to be a catalyst for economic growth, a guarantee of energy security, and a crucial step toward the notional “energy transition.”2 What goes unmentioned are the dangerous and costly concessions demanded by the U.S. as part of its nuclear bargaining. India is a case in point.
In February 2025, Modi and Trump announced a bilateral agreement promising the collaboration of Indian and American industry in the production and deployment of nuclear reactors. (The deal also envisions a major purchase by India of U.S. weaponry and joint development of AI-powered unmanned aerial vehicles, or UAVs.)
The U.S. National Defense Authorization Act (NDAA), signed in December, directed a “joint assessment” of India’s nuclear laws for the purpose of aligning India’s domestic liability standards with “international norms.” The message was unmistakable: India would be expected to tailor its safety rules and trade policies to the preferences of U.S. industry. India responded swiftly, trashing its existing nuclear regulatory regime and undertaking various initiatives intended to satisfy the US. Indeed, India’s multifaceted response has gone well beyond the minimum requirements demanded of other countries.
To understand India’s exceptionally dutiful compliance, it is important to keep in view the role and policies of US imperialism and the related role and policies of India’s big business houses. This relation is reflected in (1) new Indian legislation for the sector, (2) specific provisions in the Union Budget of 2026-27, (3) the plans of US technology corporations, and (4) the efforts of Indian big business houses to further integrate themselves with US imperialism and plans of US corporations.
(1) The SHANTI Act, passed by India’s Parliament on December 18, 2025, has been framed specifically (i) to exempt US equipment suppliers from any liability, and (ii) to allow for the first time private Indian firms to enter nuclear power generation.3 The new law replaces both the Atomic Energy Act of 1962 and the Civil Liability for Nuclear Damage Act of 2010. Among other things, the legislation is designed to undermine India’s ability to regulate nuclear safety.
(2) Under the 2026-27 Budget:
Customs duties on critical imports for nuclear power generation (for all sizes of nuclear power projects) have been suspended till the year 2035. This will improve the market for nuclear equipment suppliers, predominantly US firms, by reducing costs and helping private Indian firms attract financing for nuclear projects.
The allocation for the public sector Nuclear Power Corporation of India (NPCIL) has been slashed from Rs 8,092 crore in 2025-26 to Rs 5,300 crore in 2026-27. Says the nuclear industry mouthpiece Nuclear Business Platform, “This is not fiscal neglect. It is strategic intent.” The public sector is being shrunk to make the field more attractive for private firms.
The Finance Minister has granted a tax holiday till the year 2047 to any foreign company providing cloud services to customers globally by using data centre services from India. These data centres, mainly of US firms, are growing rapidly in India, and need energy continuously, 24 hours a day and on a very large scale. This accelerating growth would put a large strain on India’s electricity grid, not to mention derailing its international commitments regarding reducing carbon emissions. Clearly, the US and Indian governments are promoting the setting up of nuclear plants for dedicated power supply to foreign firms’ data centres in India. The handy argument that nuclear power will decrease carbon emissions is being deployed as a pretext. Indeed the CEO of the Council on Energy, Environment and Water (CEEW), pontificates that it is a “false binary” to pit climate action against AI and data centres. “We have to bring these two revolutions, the decarbonisation revolution and the digital revolution, closer together, like a double helix.”
(3) The drive to expand nuclear power in India did not arise spontaneously, but in response to the “all-out push for nukes orchestrated by tech multibillionaires in collaboration with the Trump administration”. This was reflected in the February 13, 2025 meeting between Trump and Modi. That meeting welcomed the Indian government’s decision to amend its nuclear laws to “address the issue of civil liability and facilitate the collaboration of Indian and U.S. industry in the production and deployment of nuclear reactors. This path forward will unlock plans to build large U.S.-designed reactors and enable collaboration to develop, deploy and scale up nuclear power generation with advanced small modular reactors.”
(4) The corporate strategies of leading Indian business houses such as Reliance, Adani and Tata are closely aligned with the Modi government’s policies. At the AI Summit in February 2026, the Adani house committed $100 billion of investments to develop “renewable-energy-powered, hyperscale AI-ready data centres by 2035”; Ambani committed $110 billion to the same cause; and the Tata Group and OpenAI announced a “multi-dimensional strategic partnership, that will drive AI-powered innovation across enterprise, consumer, and social sectors.” The Indian firms describe the provision of data centre services to US firms as India’s “sovereign AI infrastructure”.
It is no surprise that on February 12 the Adani Group announced its entry into the nuclear power sector by incorporating a wholly owned subsidiary — Adani Atomic Energy Limited. According to Jeet Adani, “Nuclear [energy] is something that we have been very, very actively looking at. I think it was tabooed for too long.” The foray into nuclear energy would be closely tied to the demand for power from the data centres. He sees bright prospects for power demand from AI centres: “If India plays its cards right, it can easily convince the hyperscalers to build 10 GW of data center capacity in the next five years. I see [demand for] 50 GW of renewable electricity coming just from the data centres.”
On the one hand, Gautam Adani has been the target of investigations and even criminal prosecution in the US, an unsubtle threat by US imperialism to the summit of the Indian big business class. At the same time, he has also been a special partner of US imperialism’s geopolitical plans: (i) Adani’s solar venture is explicitly part of a drive to shift India away from Chinese solar equipment; (ii) Adani manufactures weapons for Israel in a joint venture with Elbit, and has exported these to Israel during the genocide; (iii) Adani has won the privatization tender for Haifa port; (iv) the starting point of the proposed (now probably aborted) India-Middle East-Europe Economic Corridor was to have been Adani’s port at Mundhra, and the midpoint Haifa. These two processes are in fact a single process of domination, dependence and periodic disciplining, followed by submission and subordinate collaboration, which marks the relation between Indian big business and imperialism.
This superficially collaborative but essentially coercive process entirely excludes India’s people, whose health and well-being are considered irrelevant, if they are considered at all. In India and elsewhere, the US program of nuclear imperialism is designed to ensure that the costs of remediating atomic accidents will be transferred to the people. Along the complex nuclear supply chain, industrial accidents are inevitable; at the level of individual NPPs, accidents may be relatively low-probability events, but the consequences of any accident are potentially catastrophic.4 Physicists M.V. Ramana and Suvrat Raju point out that the insistence of U.S. nuclear suppliers on absolute indemnification exposes the hollowness of their safety claims:
If reactors are so safe, why would nuclear vendors take extreme precautions to protect themselves from the consequences of an accident? If companies such as Westinghouse recognise that the risk of an accident is real and are unwilling to risk financial losses, why should Indian citizens who live near a reactor be willing to risk their lives and property?
Indemnification, they argue further, “removes any direct economic incentive for suppliers to ensure reactor safety once a sale is completed.”
With industry thus unleashed, the outcome of the coming nuclear bonanza might well be an atomic version of 1984’s Bhopal disaster. In that event, the people would pay dearly, and not solely in the financial sense.
Modi’s India went the extra mile to accommodate nuclear imperialism; for most actual and potential nuclear countries, a simpler expedient is the adoption of the Convention on Supplementary Compensation for Nuclear Damage (CSC), which is also satisfactory to the U.S. This is an international treaty managed by the IAEA that, like SHANTI, assigns liability for nuclear accidents to operators alone, exempting suppliers. US companies are thus shielded from accountability.5 The U.K., for example, acceded to the CSC in October 2025, immediately after striking its own nuclear deal with Trump.
Many more countries will follow suit. In collaboration with the IAEA, the US is pushing hard to create a “global nuclear liability regime” in order to prepare member states to accommodate imperialist investments. The expansion of American nuclear technology will be indemnified while the moral hazard of liability caps will be globalized, undermining incentives to invest in safety and risk mitigation.
And the risk of nuclear accidents can never be trivial. In the words of journalist G. Sampath:
The essence of nuclear governance is safety. That’s not only because any accident can destroy thousands of lives – it’s also because the harm unfolds over time, affecting generations. It can destroy entire regions, as nuclear radiation can make them uninhabitable for a long time. It is thus a matter of common sense that safety has to be a higher priority than any other consideration — including energy security.
Editor’s note: Jacob Levich writes on Substack and X under the handle @cordeliers. His excellent three-part exposé of the attempt to revive nuclear power in the US can be found at https://cordeliers.substack.com/p/the-socialist-case-for-radiation, and subsequent instalments. ︎
Following the US attack on Iran, “security” is rapidly supplanting “climate” as the preferred buzzword of nuclear power advocates. Former US Secretary of State John Kerry and European Commission President Ursula von der Leyen are now among those urging fast-track development of nuclear power because Iran’s ability to control the supply of fossil fuels renders Europe and the US “strategically vulnerable.” ︎
Full Text here. The law also establishes “absurdly low” caps on operator liability that are likely inadequate to cover the damage that a serious accident would cause. Operator liability is now capped on a scale based on plant capacity, in a range from ₹100 crore (approximately $10 million) to a maximum of ₹3,000 crore (approximately $300 million). These sums are not large considered in light of the staggering price of nuclear accident remediation; e.g., the cost of the Fukushima cleanup is now estimated at $1 trillion, excluding hundreds of billions in shareholder damages and victim compensation. ︎
Even in the absence of nuclear accidents as such, the serious health risks to people living near NPPs are extensively documented. ︎
The CSC also limits operator liability and theoretically provides funds to cover remediation of nuclear accidents, though the funds appear entirely inadequate in the event of a serious accident. ︎
by Hemindra Hazari and R.U.P.E. There has been a sudden rush of foreign direct investment (FDI) in India’s financial services sector. Some of the world’s biggest financial firms are leading the charge: — September 23, 2025: Sumitomo Mitsui Banking Corporation (SMBC), Japan’s second-largest bank, invested over $1.6 billion for an approximately 25 per cent in […]
There has been a sudden rush of foreign direct investment (FDI) in India’s financial services sector. Some of the world’s biggest financial firms are leading the charge:
— September 23, 2025: Sumitomo Mitsui Banking Corporation (SMBC), Japan’s second-largest bank, invested over $1.6 billion for an approximately 25 per cent in Yes Bank.
— October 2: Abu Dhabi’s International Holding Company (IHC) paid $1 billion for a controlling stake in Sammaan Capital (formerly Indiabulls Housing Finance).
— October 10: The US-based Warburg Pincus, among the world’s top 10 private equity (PE) firms, purchased a nearly 10 per cent stake in IDFC First Bank for Rs 4,876 crore ($587 million).
— October 18: Emirates NBD paid $3 billion for a 60 per cent stake in RBL Bank.
— October 24: Blackstone, one of the world’s three largest PE firms, announced it would buy a 10 per cent share in Federal Bank for $0.7 billion.
— December 22: Japan’s largest bank, MUFG Bank (formerly Bank of Tokyo Mitsubishi UFJ) injected $4.4 billion for a 20 per cent stake in Shriram Finance via a primary infusion.
— February 14, 2026: The Reserve Bank of India (RBI) gives final approval for the US private equity giant Bain Capital to acquire joint control of Manappuram Finance and up to 41.66 per cent of the company’s equity and convertible instruments for $484 million.
This inflow of over $11 billion into the sector in the space of a few months indicates (1) that foreign investors are interested in India’s banking sector, and (2) that the Indian authorities are opening up the sector to foreign investors. Note that banks such as Sumitomo and MUFG are unlikely to be interested in remaining passive investors in Indian banks and NBFCs over the medium term; presumably they are working on the assumption that they can acquire a controlling share after some time.
What is behind these developments? Well-known analysts have given different views on the question.
One interpretation is that these inflows are needed in order to compensate for India’s declining rate of household savings. Ajay Shah argues in the Business Standard says that India’s inadequate household savings “will hamper domestic investment unless restrictions are removed so as to give access to plentiful and low cost foreign capital. The $11 billion inflow in 2025 into one narrow group of firms demonstrates that foreign savings are available, when we remove the restrictions at our end.”1 The author has long been a believer in the ‘free market’ and the lifting of all capital controls.
Shah traces the sudden inflow to regulatory changes, reflected in the January 20, 2025, Reserve Bank of India (RBI) “Master Direction on Foreign Investment in India”. However, as he observes, it is not only a regulatory change, but a policy shift: “Beyond the text of the regulations, there was a perceptible shift in the supervisory approach. The RBI’s approval of majority stakes, such as the Emirates NBD acquisition of RBL Bank, suggests a new pragmatism.”
Backdrop to policy change: fall in net FDI What led to this shift? Shah notes that net FDI into India has been stuck for over a decade, and “By October 2025, net inflows of foreign direct investment (FDI) were not looking good.” He is quite right in this respect. Let us look at this development in more detail, as it is relevant to assessing his propositions, and it may turn out that the solution being offered worsens the problem it is meant to solve.
Net FDI is Foreign Direct Investment into India minus two types of outflows: (1) repatriation/disinvestment by foreign direct investors who had invested in India earlier; and (2) outward FDI, i.e., direct investment abroad by Indian investors. That is, while some foreign investors are investing money in India, some other foreign investors are taking their capital out of India; and Indian investors are investing abroad. After netting out the inflows and outflows, we get net FDI.
Over the last few years, net FDI has plummeted, falling to less than $1 billion in 2024-25 (see Chart 1). While gross inflows have remained sizeable, repatriation/disinvestment by foreign investors has risen steeply as a share of gross FDI, from 25 per cent in 2019-20 to 64 per cent in 2024-25, that is, nearly two-thirds of the gross inflows!2
Similarly, outward FDI by Indian investors has risen from 17 per cent of gross FDI in 2019-20 to 35 per cent in 2024-25. Thus the combined outflows on account of repatriation/disinvestment and Indian outward FDI have risen so steeply as to almost wipe out the gross inflows.
Source: Reserve Bank of India database.
This trend has continued during 2025-26 (see Chart 2). In September-November 2025, the combined outflows on account of repatriation/disinvestment and Indian outward FDI were greater than the gross FDI inflows, so that net FDI turned negative in the last 3 months.
Source: RBI database.
Why has net FDI fallen? Conventionally, FDI is meant to provide not merely capital but a bundle of ‘intangibles’, i.e., such as advanced technology and managerial expertise, that would strengthen India’s manufacturing sector. Thus FDI is said to differ from foreign portfolio investment (FPI), which is a purely financial flow. The efforts of successive governments to attract FDI, such as the ‘Make in India’ programme and more recently the Production-Linked Incentives programme, have done so on the basis of this claim. Further, since FDI is considered a long-term investment, it is meant to be less volatile than FPI.
Significantly, as Biswajit Dhar and K.S. Chalapati Rao point out, FDI has been increasingly concentrated in India’s services sector rather than the manufacturing sector. With growing liberalisation of the financial sector, financial services became “the overwhelming favourites of foreign investors”. Moreover, in India,
serious questions about the utility and reliability of these inflows are beginning to surface. Our detailed research into the essential character of the FDI inflows into India has shown that only about half of the inflows could qualify as real-FDI, that is, they could potentially be the providers of the ‘package of development inputs’, the critical intangibles like technology and managerial skills, besides capital.3
Along the same lines, R. Nagaraj finds that private-equity/venture-capital constitutes a growing share of FDI, rising from about 20 per cent in 2011-12 to nearly 80 per cent in 2021-22. PE/VC “by definition does not invest in greenfield [i.e., altogether new] projects that contribute to potential output. It is used to acquire existing factories, firms and brands, only to quit at the correct stock prices.”4 Thus in India, to quote Dhar and Rao, “the distinction between direct and portfolio investment can be, at best, fuzzy.”5 Identified tax havens such as Singapore and Mauritius became the main sources of FDI, rather than countries which might be sources of technology and managerial know-how.6
The problem has been compounded by the increasing desperation in official circles to obtain FDI, not for the aim of upgrading India’s manufacturing, but for meeting the current account deficit (CAD) and boosting the foreign exchange reserves. That is, rather than finding ways to increase India’s foreign earnings or curb foreign payments, the Government has been taking on more liabilities to bridge the gap. It cannot afford to look too carefully at the nature of those liabilities.
Hence foreign investors are being increasingly allowed without even minimal review. As Nagaraj points out, the same tax havens which are major sources of FDI are also major destinations of outward FDI, indicating that much of the FDI entering and exiting India may be “hot money”: “Large financial conglomerates move liquid capital across the world to take advantage of variations in tax laws, a practice known as ‘treaty shopping’…. The rising share of outward FDI suggests that India may be used as a conduit for tax arbitrage by international capital.”7
As a result of the above policies and trends, then, what is termed ‘FDI’ has proved to be increasingly fickle. Meanwhile, net foreign portfolio inflows (FPI), which are foreign inflows into India’s share markets and debt markets, fell from $41 billion in 2023-24 to $2.7 billion in 2024-25. They then fell further to -$3.9 billion, i.e., net outflows, in April-December 2025.
As capital inflows, both FDI and FPI, have fallen, this has led to downward pressure on the value of the rupee. The rupee fell 5.4 per cent against the US dollar between April 1, 2025 and January 15, 2026, making the rupee among the most-depreciated currencies in this period.
What the above discussion reveals is that FDI itself has become composed of more mobile financial flows, less and less associated with manufacturing and the domestic absorption of capabilities, and more and more concentrated in the financial sector. Out of the $11 billion of FDI inflows into India’s financial sector since September 2025, about half have been made by private equity and other financial investors. Since these inflows are of more mobile capital, we should not be surprised if they flow out.
In effect, when, as a panacea for the outflow of foreign direct investment, which is on account of the increasing share of volatile financial flows in FDI, Ajay Shah recommends opening up further to all types of FDI in the financial sector, he is not advocating it on the ground that this capital will introduce new technology or other know-how, but merely on the ground that it will bring in some more funds. This indeed is also the logic on which the Indian authorities seem to have opened up FDI in banking. In fact it is a recipe for further instability.
Shah contends that finance knows best what to do with resources:
Finance is the brain of the economy. It allocates resources to their most productive uses. These transactions make the Indian financial system healthier. By removing barriers at the border, we have allowed the brain to upgrade its processing power.
Decontrolling the brain (the financial sector) will make the entire economy more efficient. For Shah, this is confirmed by the fact that the stock market rewarded the targeted companies which recently announced FDI.
Unfortunately, history does not bear out his theory. Time after time, financial crises have emerged from the financial sector, particularly when it has been freed of regulatory ‘fetters’. The liberalisation of the American financial system led to an extraordinary financial mania, which ended in the Lehman debacle of 2008. That in turn caused a global crisis. In India, there have been many instances of major mismanagement in non-government banks and NBFCs, such as Yes Bank, IL&FS, DFHL, and recently the treasury fraud in IndusInd Bank. There have also been instances of problems in government banks, but government ownership has reassured depositors, and there has been no contagion fall-out when problems have affected government banks, unlike the private sector.
This is not just a financial sector problem. When the financial sector experiences a crisis, it can strangle credit and derail the entire productive economy.
Only at the margin? Another leading commentator on banking, T.T. Rammohan, has defended the decision to ‘open up’, arguing that Indian banks, both private and public, are much stronger than in the past: “In today’s setting, foreign banks will have their work cut out in competing with entrenched domestic players. The retail market will be difficult to penetrate without investment in a large network of branches. Without a large network of branches and low-cost current and savings accounts, taking corporate customers from Indian banks too will be a challenge”. Moreover, the banks entering the Indian market, being from Japan, “are far less formidable than a Citibank or a Bank of America,” and some others are purely financial investors. Hence this should be seen as “a welcome infusion of patient capital into banks that need more capital.”8
Rammohan himself acknowledges that, in the past, India’s regulators were concerned that, in any international crisis, foreign banks may face a capital crunch in their parent countries. In such a situation they may reduce lending and tighten credit standards in their Indian operations. This would make India more susceptible to shocks from the international financial system. However, he dismisses such concerns today, since foreign banks account for less than 7 per cent of the assets, and “there is little chance of their market share rising significantly in the medium term. Any withdrawal on their part from the credit market will not make a big difference to aggregate credit supply.”
Why India was relatively less affected in 2008 In fact, the reason India was relatively less affected by the 2008 Global Financial Crisis was that its financial sector was relatively less integrated with global finance than was the case with many other countries. Part of the credit goes to Y.V. Reddy, the then governor of the RBI, who recognised the risks in opening up to foreign banks, who “operated across borders, and across markets, through multiple organisational layers within a conglomerate. They had a network of non-banking arms operating in parallel in India…. Cross-border presence gave them an opportunity to move financial assets across the border to take advantage of differences in regulation, taxes, and interest rates.” When, in 2003 and 2004, two successive finance ministers announced they were raising the limit on FDI in banking to 74 per cent under the automatic route, and pressed Reddy to implement this, he found creative ways to frustrate their decision, as he describes in his memoir.9
In the period since 2008, however, the Indian economy has gotten more integrated with international finance, as can be seen from the data cited earlier, and any international crisis would get transmitted to India to a greater extent than in the past. Interestingly, Indian banks have been facing a liquidity crisis in recent months, largely due to the outflow of FDI and FPI. This is despite the absence of an international financial crisis. In such a situation, foreign ownership of 7 per cent of banking assets, when combined with a much larger foreign share of the non-banking financial corporations (NBFCs) sector,10 is already a considerable vulnerability.
Rammohan asserts that there is little chance of the market share of foreign banks rising in the medium term. It is true that foreign banks’ growth is hampered by their incompetence and lack of knowledge of Indian conditions. The recent limited history of FDI in Indian private sector banking does not inspire confidence in foreign investors’ management expertise. In 2018, the Canada-based Fairfax group invested around Rs 1,400 crore ($164.7 million) in CSB Bank (formerly Catholic Syrian Bank) for a 51 per cent stake, and in 2020 DBS merged Lakshmi Vilas Bank (LVB) into its Indian subsidiary DBS India. In the case of CSB Bank, the bank initially recovered, but under a subsequent CEO with private retail banking expertise the bank’s performance has been deteriorating. Meanwhile DBS India seems to have been clueless on how to leverage the erstwhile LVB’s branches, and the amalgamated DBS India has been making significant losses in its retail division after the acquisition. These examples do not convey a favourable picture of the management expertise of foreign banks in India, where conditions for retail banking are very competitive.
However, the growth of the foreign share of the Indian market hinges on the extent to which the Indian authorities allow foreign investors what is called ‘inorganic’ growth, i.e., acquisitions. At present, the scope is limited. Foreign investors, including portfolio investors, can own up to 74 per cent in Indian banks, but regulations at present cap a strategic foreign investor’s stake at 15 per cent. Any holding above 5 per cent requires RBI’s prior approval.
RBI signals change A partial change may be afoot. In June 2025, RBI Governor Sanjay Malhotra said the RBI was reviewing the ownership structure of banks. “Our economy is growing. We need more banks. Keeping that in mind, if there is a need for change, it will be done.” While he clarified there was no immediate change in the overall policy regarding the cap on foreign investment, exceptions could be made on a “case-by-case” basis.11
Without the prospect of greater control, it is unlikely Sumitomo would have invested in Yes Bank: it does not make sense as a pure financial investment. Meanwhile, Canada-based Fairfax Financial Holdings is considered a frontrunner for the Government’s majority stake in IDBI Bank, which has undergone a clean-up and returned to profitability. In this fashion, the “case-by-case” exceptions may increase, and that would increase the market share of foreign-controlled banks.
Unlike Indian private sector banking, where managerial authority and hierarchy resides within the pyramidal organisational structure in India, foreign banks operate on verticals aligned with their global structures, and hence authority for managerial decision-making in India may reside outside India and outside the purview of the RBI. In that case the impact of decision-making abroad on Indian banking would be larger than it is now. For example, in case of a crisis abroad, foreign banks may restrict their lending in India, which would have an impact on liquidity here.
The authorities’ argument for “reviewing the ownership structure” is that a growing economy’s credit needs require additional bank capital. The question is: if private banks are at present unable to cater sufficiently to the credit needs of the economy, why turn to foreign capital? The sovereign Government itself can invest additional capital in the public sector banks instead. The Government’s existing neoliberal policy frame may rule this out, but that is a reason for changing the policy-frame rather than opening Indian banking to foreign capital, which would render India more vulnerable to global developments, in a volatile global situation.
There is little ground to be complacent about Indian policy-makers’ stances regarding the financial sector. Today, the Government has abandoned several settled positions overnight under pressure: it has opened up to agricultural imports from the US, it has given commitments of expanding imports from the US by $500 billion over 5 years, it can no longer decide where it imports oil from, and so on. Moreover, India may experience further capital outflows and uncertainty on the foreign exchange front in the coming period, which would increase the pressure to attract inflows at any cost.
Interestingly, India appears to have dropped its earlier insistence on reciprocal rights for its banks and financial institutions in the parent countries of the foreign investors. Indian banks will continue to be restricted asymmetrically in those markets. This, too, indicates that the decision to open up was not a considered decision taken in the long-term interest, but a decision made under pressure of the collapse of net foreign investment in India.
Conventionally, one thinks of FDI as representing an inflow of share capital from abroad. However, the official definition of FDI used by India includes two further categories: reinvested earnings, which are generated within India itself; and inter-corporate loans, which are actually a form of debt, not share capital. In 2024-25, reinvested earnings came to 28 per cent of gross FDI, and inter-corporate loans came to 9 per cent. If we deduct reinvested earnings and inter-corporate loans from gross FDI, the remainder for 2024-25 was only $51 billion (63 per cent of gross FDI). In the same year, foreign investors repatriated/disinvested $51.5 billion (equivalent to 64 per cent of gross FDI). This means that the figure of actual inflows of share capital from foreign investors turned negative even if we disregard outflows on account of Indian investors investing abroad. ︎
Biswajit Dhar and K.S. Chalapati Rao, Understanding Foreign Direct Investment, 2020, p. 170. Their data are up to the year 2018. ︎
R. Nagaraj, “Reversing India’s Industrial Decline: Need for Redesigning Policies”, Economic and Political Weekly (EPW), March 15, 2025. ︎
Read this article in Marathi I. What are the implications for India of the US-Israel attack on Iran? To understand this, we need to place this development in the context of the present world situation, and India’s political economy within that. Let us first address the following questions: Why has the US undertaken this attack? […]
What are the implications for India of the US-Israel attack on Iran? To understand this, we need to place this development in the context of the present world situation, and India’s political economy within that. Let us first address the following questions: Why has the US undertaken this attack? What are its implications for the region and the world?
The United States and Israel have begun the attack by assassinating Iran’s top-most political and military leadership: the Supreme Leader, Ayatollah Ali Khamenei; the Armed Forces Chief of Staff; the Defence Minister; the Secretary of the Supreme National Defence Council; and the Commander of the Islamic Revolutionary Guard Corps (IRGC). While such an assassination by any government would normally be treated as an international outrage, the Western media have taken for granted that this is a legitimate act, and depicted it as an achievement.1 In fact it falls in the category of crimes defined in the Nuremberg war crimes tribunal, “namely, planning, preparation, initiation or waging of a war of aggression, or a war in violation of international treaties, agreements or assurances.” By international law, Iran thus possesses the right of self-defence and retaliation, both against the countries directly carrying out these attacks and those assisting them.
Countering wrong notions The bombing of a girls’ school in Minab, where the death toll has now reached 175, should not be seen as an isolated event or an aberration. Fascism works by a completely different logic. For the logic of fascism, pretences at humanitarianism are not only no longer necessary, but counter-productive. The school massacre is intended to tell the Iranian people that this will be their fate if they do not submit. To remove any doubt, by the third day, the US/Israel bombed 9 hospitals, in a calculated reminder of Gaza.
There is a widespread notion that the aggression on Iran is the result of Israel-Netanyahu manipulating the US-Trump; some go so far as to talk of the US as a puppet of Israel. Such talk is at best mistaken, at worst diversionary. The kidnapping of Venezuela’s president Maduro, and the attempt this time to starve Cuba of fuel and make it submit, are in line with this aggression on Iran. Yet no one would claim that Israel manipulated the US into those earlier actions. Rather, all these actions are intended to serve broader US policy. The danger in such mistaken notions is that they lull people into thinking that the present policy can be overcome merely by changing the individuals in office, or even just changing the minds of those at present in office.
Another mistaken but widespread notion is that this aggression can be ascribed to the madness of Trump as an individual. In fact, all the institutions of the US state are carrying out these policies, and the strategic vision behind them is spelled out in key documents of the present administration. US Secretary of State Marco Rubio, addressing the Munich Security Conference on February 14, called for a return to the era of European colonialism:
For five centuries, before the end of the Second World War, the West had been expanding – its missionaries, its pilgrims, its soldiers, its explorers pouring out from its shores to cross oceans, settle new continents, build vast empires extending out across the globe…. But in 1945, for the first time since the age of Columbus, it was contracting…. The great Western empires had entered into terminal decline, accelerated by godless communist revolutions and by anti-colonial uprisings that would transform the world and drape the red hammer and sickle across vast swaths of the map in the years to come.
Rubio called on Europe to join the US in reviving “the West’s age of dominance”. His speech was welcomed by the European imperialists. On March 1 the UK, France and Germany joined the US and Israel as partners in the aggression on Iran, while Japan, Canada and Australia have extended their political support to it. Clearly, we must not restrict our analysis to individuals, but to the logic of the system.
Aggression part of a systematic drive Indeed, this aggression is part of a broad, systematic drive by a declining US imperialism to re-assert its military and economic hegemony over the world, principally by attacking the Third World. At some places this takes the form of military aggression and terrorism, at others the form of the imposition of sweeping, unilateral economic concessions or outright capitulations garbed as ‘trade deals’.
Countries which defy US imperialism are invaded militarily; countries whose rulers submit to it and supplicate it, such as India, are invaded economically. As such, the Indian people are experiencing another aspect of the same power that is bombing Iran. The difference is that the Indian people find their own rulers on the other side: The so-called ‘trade deal’ announced between India and the US, which was welcomed so enthusiastically by Indian big business, is not a trade deal at all, but a colonial-style imposition on India.
The stakes of the present US venture are high. The global hegemony of the US dollar has been slowly eroded for some time, particularly during the last few years. The re-assertion of US political control over West Asia is key to re-assertion of dollar hegemony. Further, the US economy has staked vast outlays on its financially bloated tech sector; a powerful cabal of US tech moguls has provided Trump crucial backing; and Trump in turn is promoting the global dominance of these firms by classical imperialist measures. All these efforts, however, hinge on the re-assertion of overall US hegemony worldwide. Without that, they fall apart. For all their grumbles, the Europeans and the Japanese appear to have finally clambered on board this venture.
As part of its gamble, US imperialism has made clear that it is willing to undergo a period of instability, even chaos, in the international economy. “Whatever it takes”, said Trump on the fourth day of the war, laying out his vision for the military campaign. Stock prices internationally have fallen, the strait of Hormuz (through which passes 30 per cent of global seaborne oil trade and 20 per cent of global LNG trade) is closed, oil prices have climbed, the world’s busiest airport (Dubai) is closed. It is even possible that the US wants this disruption: Asian economies, which are particularly dependent on oil from the Gulf, will be hit hardest. But any such turmoil, in the situation of existing uncertainty worldwide, is bound to affect the US economy as well. For this reason, several analysts assume that Trump is misled, or ignorant. However, what we saw last year, during Trump’s unilateral imposition of tariffs worldwide, was that US imperialism is prepared for a period of chaos (even within the US) in order to achieve its aims, since it sees that those aims cannot be achieved in the normal course.
It is true that US imperialism’s grand venture is, in the final analysis, doomed, but such objective constraints never stopped imperialists from trying to grab, or hang on to, power. The pace at which, and form in which, those objective constraints get manifested is the outcome of the subjective effort of millions of the world people, including the leaderships of those efforts. The New York Times of September 6, 1934 told the world that “HITLER FORECASTS NO REICH OVERTURN IN 1,000 YEARS”. That project was similarly doomed to fail, but it did not fail on its own. Millions had to give their lives before it could be stopped and turned back. The turning-point came at the Battle of Stalingrad in 1942, and it required many more battles, overwhelmingly on the Soviet front, but also other fronts, before it could be actually defeated. And so it is not enough to say that the US is a paper tiger strategically; for it is a real tiger tactically.
Iran is a special target precisely because it has been the linchpin of resistance to this joint venture of the Western imperialist alliance, and more generally to Western imperialist control of the entire region. The immediate participants in the resistance – Ansarallah in Yemen, Hezbollah in Lebanon, Hamas in Gaza, Bashar al-Assad in Syria, Kata’ib Hezbollah in Iraq – have all been attacked, some most grievously, and Bashar al-Assad has been ousted. Iran has played a critical role in sustaining this resistance over the last two or three decades.
The media, and even much of the alternative media, fail to report that the various contingents of this resistance see themselves as part of a broader, indeed worldwide, resistance to imperialism – not limited to West Asian or Muslim countries. This has been reflected repeatedly in the statements of Hezbollah, Hamas, and Ansarallah, as well as Iran. The Supreme National Security Council of Iran, in its statement after Khameini’s martyrdom, said that not only the nation of Iran, or the Islamic Ummah, but the “freedom-seekers of the world are in mourning”. It stated that “Undoubtedly, the martyrdom of that immensely significant figure will mark the beginning of a great uprising in the fight against the world’s oppressors.”
If the resistance were to be ousted from Iran, it would strengthen the hands of US imperialism in Latin America; if the resistance by Iran and its allies endures this aggression and thereby triumphs over the aggressors, that victory would be felt in Havana and Caracas as well. The resistance being waged by Iran is thus not of Iran alone.
II
The ‘regional war’ bogey The claim that ‘Iran has started a regional war’ has served as the chief alibi for those who wish to line up behind the US and Israel. The reality is that (1) the US has stationed its forces throughout the region by agreement with client states, and (2) throughout the imperialist build-up to the US-Israeli aggression, Iran consistently warned that, if attacked, it would strike back against all US and Israeli assets in the region.
The US has military bases, facilities, and equipment throughout the region – in Jordan, Kuwait, Bahrain, Syria, Qatar, Saudi Arabia, Turkiye, Iraq and the UAE. Hence no one should have been surprised when Iran proceeded to do as it had promised after being attacked. Nevertheless, Iran’s self-defence has been greeted with cries of simulated outrage. The UK, France and Germany promptly used this as an excuse to join the US and Israeli aggression.2
Source: Al Jazeera, based on Council on Foreign Relations
The impact on India, and the stand of the Indian government The Indian authorities failed to criticise the US-Israeli aggression, or the assassination of the head of state of Iran. This is despite the fact that the Indian government till recently referred to Iran as a friendly country. Given the strains or outright hostility marking India’s relations with the majority of its neighbours, its warm relations with Tehran were particularly important to it. Iran was a major supplier of oil to India on generous credit terms, until May 2019 (when the US pressurised the Indian government into discontinuing purchases from Iran and Venezuela). India had made large investments in Iran’s Chabahar port, but these were discontinued in the latest Central Budget. Chabahar would have provided it access to Afghanistan, as well as the critical International North-South Transport Corridor between India, Iran, Azerbaijan and Russia.
Now the Indian Prime Minister has condemned Iran’s strikes, which are carried out in self-defence. Instead he has phoned the rulers of the UAE, Saudi Arabia, Bahrain and Jordan to express his solidarity with them. With this, the Indian government appears to have abandoned even the remnants of neutrality, and thrown in its lot with the US-Israeli side. What explains this stand? In fact the stand taken by India is a carefully considered one, as we shall see.
No doubt, the impact on India of the present war may be very severe. Half of India’s oil imports come through the strait of Hormuz (between Iran and the Arabian landmass), as do 60 per cent of its LNG imports and an even higher share of its LPG imports. There is no aspect of India’s economy which would be untouched by a prolonged conflict, since oil is a universal input, including transport, fertiliser, irrigation, and food. Further, the Gulf countries and Iran are important destinations for Indian exports, and so export earnings too might suffer. Finally, 9-10 million Indians work in the Gulf region, and they sent home nearly $50 billion in remittances last year.3 This critical inflow may be interrupted by the present war. In short, India would require more dollars for each barrel of oil, but less dollars would be flowing in. So the exchange rate of the rupee, which has already been under pressure due to outflows of foreign investment, will fall further.
This development brings to the fore certain contradictions of India’s economy and the extent of its domination by foreign capital:
(1) If the hiked international price of oil, and the rupee depreciation, are passed on to Indian consumers, that would lead to all-round inflation. This inflation could trigger yet further depreciation of the rupee, as foreign investors pull out. A downward spiral of the rupee may cause the Reserve Bank of India to hike interest rates, in order to offer attract foreign capital inflows and suppress inflation. An increase in interest rates may push Indian industry from its current stagnation into outright recession.
(2) If the hiked price of oil is not passed on to consumers, the difference would have to be absorbed by the Government, by slashing the heavy taxes on petroleum products. This would substantially reduce budgetary funds, so heavy is the dependence on petroleum taxes for Government revenues. And so Government spending would have to be cut. Reduced Government spending too would depress aggregate demand.
(3) In theory, the loss in tax revenues could be made up by increasing Government borrowing (i.e., increase the fiscal deficit), thereby protecting at least the existing level of Government expenditure. However, international credit ratings agencies disapprove of any increase in Government borrowing, and their disapproval would result in further exit of capital from the country, and yet further depreciation of the rupee. The Government’s earlier opening of Central Government bonds to foreign investors, and its efforts to attract more foreign investment into such bonds, is an additional pressure on it to maintain the fiscal deficit target. It is in such desperate situations that Third World governments make yet further concessions to foreign investors, opening up new sectors or selling off precious assets.
(4) The Gulf crisis of 1990-91 contributed to India’s balance of payments crisis in 1990-91, which crisis led the Indian rulers to approach the International Monetary Fund for a structural adjustment loan. This time, however, it appears that India has vast foreign exchange reserves and is thus protected from any such desperate situation. However, India’s foreign exchange reserves have not been built up from export surpluses, since in fact it runs current account deficits continuously. Rather, the reserves have been built up from foreign liabilities, that are even larger than the reserves. These liabilities are in the form of foreign loans and foreign investments in India. These funds, including much of the foreign direct investment (FDI, which is supposedly more stable and long-term), are volatile. Over the years, successive Indian governments have opened the country further and further to foreign capital flows; thus India is now at the mercy of international capital movements.
(5) The immediate steps taken by the authorities to meet the present crisis would either push up prices or depress aggregate demand, or, more likely, some mix of the two. As we have written earlier, the incomes of large sections of the Indian people have been depressed, and they have had to cut back on simple items of mass consumption such as textiles, garments, leather goods, and items of daily use such as soap, detergent, toothpaste, tea powder, food products, medicines, and paper. This new development may thrust vast numbers into yet deeper misery.
Thus the decision of US imperialism to commit aggression on Iran is one with enormous implications for India. Given the scale of this impact, and given the long build-up to it, one might have expected that any state power concerned with the lives of its citizens would make active diplomatic efforts to prevent the war. An active role of a large country such as India could not have been simply dismissed, and it might have rallied round other countries around the world which too might stand to lose from such a war.
However, the Indian government took a considered decision to do the opposite: namely, for the Indian Prime Minister to visit Israel just two days before the war. There India and Israel elevated their existing “strategic partnership” to a “special strategic partnership”, encompassing defence and security, technology, cybersecurity, trade, and supply of Indian labour to Israel. The Indian Prime Minister announced to the Israeli Parliament that “India stands with Israel, firmly, with full conviction, in this moment, and beyond.”
The real significance of this is that India stands with the US, in this moment and beyond. As such, this stand cannot be seen separately from the decision of the Indian government to conclude a ‘trade deal’ with the US which is not a trade deal at all, but a colonial-style imposition on the Indian people. (In passing, one should note that, if India wishes to import Russian oil as an alternative in the present emergency, it clearly will need Trump’s permission to do so.) A plain reading of that “framework for an Interim Agreement”, along with various statements by the US authorities which have not been denied by their Indian counterpart, reveals that the “framework” will have ruinous effects for the Indian people (a subject that requires a separate discussion).
However, Indian big business welcomed the “framework” unanimously. It has hitched its wagon to US imperialism. The same considerations lie behind the Indian government’s stance regarding Israel and Iran. The present war on Iran lays bare once again the direct conflict in class interests within India.
Obituaries in the New York Times, the Washington Post, the Guardian, Associated Press, CNN, the BBC, and Le Monde celebrate this assassination. The BBC obituary is headlined “Ayatollah Khamenei’s iron grip on power in Iran comes to an end”. Nowhere do any of them question its legitimacy in international law. ︎
March 1, 2026: “The Leaders of France, Germany and the United Kingdom are appalled by the indiscriminate and disproportionate missile attacks launched by Iran against countries in the region, including those who were not involved in initial US and Israeli military operations. Iran’s reckless attacks have targeted our close allies and are threatening our service personnel and our civilians across the region. We call on Iranz to stop these reckless attacks immediately. We will take steps to defend our interests and those of our allies in the region, potentially through enabling necessary and proportionate defensive action to destroy Iran’s capability to fire missiles and drones at their source. We have agreed to work together with the US and allies in the region on this matter.” ︎
Nearly double the figure for net inward foreign direct investment (FDI), which was $29 billion in 2024-25. Indians in the Gulf are predominantly manual labourers, who manage to send back around $400-$500 per worker per month. ︎
Even those waging outright wars of aggression are frequently at pains to justify their actions with falsehoods and distortions. This helps to prevent others from coming to the aid of the victim of aggression. The onslaught of false propaganda becomes, in effect, an important part of the war of aggression. And those participating in such […]
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Even those waging outright wars of aggression are frequently at pains to justify their actions with falsehoods and distortions. This helps to prevent others from coming to the aid of the victim of aggression. The onslaught of false propaganda becomes, in effect, an important part of the war of aggression. And those participating in such propaganda thereby become participants in the aggression as well.
Nazi Germany was well aware of the importance of propaganda. Before Germany occupied Czechoslovakia, it loudly claimed that the German-speaking minority in that country was being persecuted. Meanwhile, it secretly funded a puppet pro-Nazi party which claimed to represent the German minority of Czechoslovakia (the ‘Sudeten Germans’). Indeed the ground for the German occupation of Czechoslovakia was laid in the name of democracy and minority rights. The leader of the ‘Sudeten German’ pro-Nazi party, Konrad Henlein, was considered by the British Foreign Office to be moderate and reasonable; meanwhile, in his meetings with Hitler he secretly agreed that “we must always demand so much [from Prague] that we cannot be satisfied.”1 The purpose of Henlein’s provocations was to elicit suppressive measures from the Czech government, which measures were promptly portrayed by Germany as atrocities.
In his September 12, 1938 speech at Nuremberg, Hitler accused the Czechoslovakian government of exterminating the German minority, driving them from their homes, repressing their democratic rights and executing German prisoners. This was followed by an uprising by the Sudeten Germans in mid-September 1938. Later, the Sudeten ‘volunteer’ forces (created on Hitler’s direct order, and sheltered, trained and equipped by the German army2) carried out terroristic raids on Czech government institutions.
The propaganda that the Sudeten Germans were being oppressed and exterminated provided sufficient cover for Britain and France to treat Hitler’s demands as legitimate. British Prime Minister Neville Chamberlain drew a fine distinction: he did not want Hitler to take Czechoslovakian territory by force, but by peaceful means.3 So Britain and France issued the Czechs an ultimatum to cede the German-speaking territories to Germany. After occupying the Sudeten region “peacefully”, Hitler proceeded to occupy the rest of Czechoslovakia militarily. In this manner, manufactured propaganda about the oppression of the German minority in Czechoslovakia served to subjugate the entire country.
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Recently, when for two or three weeks protests broke out in Iran at the end of last year, world attention was focussed on these protests, the Iranian government’s response to the protesters, the subsequent acts of violence and turmoil, and the statements and actions by the US and Israel in connection with these developments.
The western media version was explicit from the start: that Iranian citizens staged a peaceful revolt against a governing dictatorship; that the regime responded with a massacre of thousands of protesters (evidence-free estimates go up to 40,000 fatalities and over 300,000 injuries) and communications black-out; the US-based Reza Pahlavi (son of the erstwhile Shah of Iran, who was overthrown by the Iranian revolution of 1979) emerged as the leader of the people’s movement; the Iranian regime was fragile and near collapse; brutal repression finally quelled the movement, for now.
Intervention Other commentators have brought out a very different reality. The protests began as the voicing of genuine popular grievances regarding the dire economic situation, a situation which had been created precisely by US sanctions on Iran. The Iranian government acknowledged the legitimacy of the protesters’ grievances, and called for dialogue.4 However, at this point (around January 8-9), the protests were hijacked by shadowy forces – trained groups of armed provocateurs and agents of the US/Israel. Indeed, the Israeli spy agency Mossad posted social media messages in Farsi claiming it was “with the protesters in the field”, and urging them on. “Happy New Year to every Iranian in the streets. Also to every Mossad agent walking beside them,” wrote former US Secretary of State Mike Pompeo on the social media. The provocateurs committed arson, lynched over 100 police or security forces, and killed many ordinary Iranians.5 US President Trump called on Iranians to “take over” their institutions, adding that “HELP IS ON ITS WAY”. Meanwhile, CIA-backed outfits and the Western media peddled bogus figures of fatalities and government atrocities.
However, the vast majority of Iranians, including those who are critical of the government’s policies, opposed the rioters, and dissociated themselves from them. Millions of Iranians attended rallies to condemn the rioters and the sinister forces that backed them, specifically the US and Israel. In a nutshell, the second phase of the recent Iranian protests, as well as the international propaganda about the protests, were a form of imperialist intervention in Iran’s political life.
A ‘third position’ Against this background, several persons widely considered leading personalities of the ‘Left’ in the West claim to have taken a position distinct from both the above versions. These personalities include Jeremy Corbyn, Zarah Sultana, Jean-Luc Melenchon, Sahra Wagenknecht, Yanis Varoufakis, Tariq Ali, Owen Jones, Zohran Mamdani, Alexandria Ocasio-Cortez, and Bernie Sanders; similar positions are taken by the US magazine Jacobin, the website Drop Site and the European political platform DiEM25.6 These personalities and platforms broadly reproduce the account of the western media (a people’s revolt against authoritarianism, brutally repressed), but they oppose intervention by the US and other western countries. They say the Iranian people must determine their own future, and the US and other western countries should only support their aspirations from afar.
At first this seems to be a significant demarcation from Trump, Netanyahu, Macron and other western leaders. However, in fact this is only seemingly a distinct position.
An essential preparation An essential preparation for foreign intervention in, bombing of or invasion of Iran is precisely the international propaganda about the events there. Such propaganda has indeed been an essential part of every imperialist invasion by the US and its allies, whether of Afghanistan, Iraq, Libya, Syria, Venezuela, Gaza or any other. The world was told that Iraqi forces invading Kuwait tore babies out of incubators in hospitals (which became famous later as the “Nayirah testimony”); later that Iraq was developing nuclear weapons; that Gaddafi of Libya gave his troops Viagra and encouraged them to commit rapes in rebel-held or disputed areas; that the Syrian government used chemical weapons on rebel-held areas; that Maduro rigged the Venezuelan elections, and that he smuggles drugs into the US; that Hamas killed Jewish babies on October 7 by putting them into ovens, and committed mass rapes of Jewish women; and so on. Such stories were succeeded by unimaginable horrors inflicted on the people of those lands by US imperialism.
The latest such propaganda-before-invasion is that Iran is committing massacres and atrocities on its own people. None of the estimates can be traced to a specific source inside Iran. Rather, the sources are unnamed Government officials or unnamed witnesses cited by the Western media; Iran-focussed NGOs located in the US, which receive funding from the CIA-linked National Endowment for Democracy; organisations of overseas Iranians; a Saudi-funded satellite channel located in London, and so on.
Second, it is not in dispute that the US and Israel have an extensive network of agents in Iran, who are capable of carrying out mayhem. For example, this network has carried out targeted assassinations of Iranian nuclear scientists for more than a decade. Five were killed between 2010 and 2020 by car bombings or shootings; at least 10 more were killed in the Israeli air strikes of June 2025. Clearly the US-Israeli network of agents in Iran is sizeable, armed and deadly, and it is very credible that they hijacked the protests and carried out mayhem. The alternative is to imagine that this network passively watched events unfold and took no action.
The fundamental question Fundamentally, however, the question does not pivot on the specific number of people who have died, or the repressive action taken. Once it is clear that both the post-January 8 riots and the propaganda about them were an imperialist intervention in Iran, and an attack on Iran’s sovereignty, there can be only one consistently democratic position: namely, to categorically oppose the riots, the propaganda, and the war designs of imperialism.
This is so because, whatever criticisms anyone may have regarding the social, economic or political policies of the Iranian government, imperialist invasion and occupation is the most complete form of despotism, over which the Iranian people have no control in any form. Therefore in the given world constituted of nations, national sovereignty is a pre-requisite of any people exercising their social, economic or political rights, and when the sovereignty of a Third World country is attacked by an imperialist power, the primary duty of those who cherish democracy is to support the country under attack.
The attack on a country’s sovereignty may come clothed as democracy. Take a recent instance: It is reported by the New York Times that a “ragtag network of activists, developers and engineers pierced Iran’s digital barricades” by smuggling in 50,000 Starlink satellite terminals – each at a cost of $700-800 – and spread them throughout the country, at discreet locations. (NYT presents this children’s fairy tale with a straight face, and it appears there are some adult children who believe it.) Elon Musk’s Starlink normally provides internet connectivity for a price, but the generous Mr Musk announced in January that all Starlink services in Iran would be free of charge.7The Starlink network would thus enable US agents to communicate with one another in the field, and also enable the spread of western propaganda inside Iran. In this fashion, what is presented in the western media as the spread of democratic communication is actually imperialist intervention in Iran’s political life.
It does not appear that the ‘Left’ personalities mentioned above have independently applied their minds to the claims being circulated by the western media and CIA-backed institutions. One ‘alternative’ website posted a video of a “rare interview with Iranian protester and crackdown eyewitness”, said to be a member of the Iranian diaspora who had visited Tehran. The interviewee (whose anonymity was protected by pixellating her image and distorting her voice) said: “I know that there’s a lot of discussion of who could hijack the movement, the freedom movement of the people of Iran and it’s very possible, but I can tell you this, the way that the Government of Iran has responded to the protests, every single person in Iran would happily join any intelligence service to end this regime.”8 Even if we take the anonymised speaker to be a real member of the Iranian diaspora, and not an AI manufacture, her propaganda is manifestly against the Iranian people and their sovereignty.
Conscientious objectors No doubt, as we noted earlier, these ‘Left’ personalities and platforms do not support plans for a US invasion or military strikes. That merely means that, while they are effectively participants in the propaganda war, they are conscientious objectors in the military war.
Apart from the material damage in human lives, buildings, ambulances, buses, and so on, the propaganda war has inflicted damage on Iran’s political reputation. Such damage was inflicted on the Syrian government under Bashar al-Assad, the Syrian people underwent a civil war, and eventually, after they faced 14 years of bloodshed and sanctions, the US and its allies installed a Muslim fundamentalist regime in Damascus. In the process, an important and reliable support for the Palestinian struggle was destroyed, and the US and Israel have even been able to occupy swathes of Syria. The propaganda war against Assad helped lay the ground for this outcome, and this outcome has laid the ground for the attack on Iran.
However, the riots in Iran have ended, and it is not possible for outside forces to revive them very soon. The ‘Left’ critics of Iran have been useful, but their usefulness has been exhausted for the moment. Trump has moved on. Discarding his talk of sending “HELP” to Iranian protesters, he now declares that he has despatched an ‘armada’ which will destroy Iran if Iran does not dismantle its nuclear programme:
Hopefully Iran will quickly ‘Come to the Table’ and negotiate a fair and equitable deal – NO NUCLEAR WEAPONS – one that is good for all parties. Time is running out, it is truly of the essence! As I told Iran once before, MAKE A DEAL! They didn’t, and there was ‘Operation Midnight Hammer,’ a major destruction of Iran. The next attack will be far worse! Don’t make that happen again.
While the methods may change from time to time, there is evidently a continuity in imperialist aims, for those who wish to see it.
We have changed the title of the article, and added a sentence to the text, in order to make our meaning clearer. — Feb. 4, 2026.
Mark Cornwall, “The Czechoslovak Sphinx: ‘Moderate and Reasonable’ Konrad Henlein”, in Rebecca Haynes and Martyn Rady, eds. In the Shadow of Hitler, Personalities of the Right in Central and Eastern Europe, 2014. ︎
Clement Leibovitz and Alvin Finkel, In Our Time: The Chamberlain-Hitler Collusion, 1997. ︎
Even an establishment newspaper unsympathetic to the Iranian government reported:“The regime’s initial response — at least by its own brutal standards — appeared restrained, as officials sought to appease the demonstrators’ economic concerns.” Mehul Srivastava and Najmeh Bozorgmehr, “How Iran’s Regime Retook the Streets”, Financial Times, January 16, 2026. ︎
Passages such as the following in news reports should have given any conscientious reader pause to think: “Residents have shared accounts of burned buses, mosques and police stations across their cities, while officials have accused armed agitators of hiding among the demonstrators.” — Najmeh Bozorgmehr, “Dispatch from Tehran: The week the Iranians revolted against the regime”, Financial Times, January 13, 2026. “Testimonies from the scenes of the unrest — some spoken directly to the FT, in addition to those smuggled out through intermediaries — reveal a muddied account of the turmoil itself, in which agitators mingled with genuine protesters. Clashes claimed the lives not just of unarmed citizens who formed part of the leaderless crowds, but of well-equipped security personnel. “‘There were groups of men in black clothes, agile and quick,” said one demonstrator in Tehran. “They would set one dustbin on fire and then quickly move to the next target.” Another witness in western Tehran told the FT he saw about a dozen fit men, “looking like commandos”, dressed in similar black clothing, running through the area and calling on people to leave their homes and join the protests. ‘They were definitely organised, but I don’t know who was behind them,’ he said. — Mehul Srivastava and Najmeh Bozorgmehr, “How Iran’s Regime Retook the Streets”, Financial Times, January 16, 2026. ︎
Who is to blame for India not becoming a developed nation? It is the people. Our Government invests vast sums in setting up an airport every 50 days for them, but they refuse to fly: Our Government invests vast sums in putting up metros in every city, but people won’t ride them: Simply because the […]
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Who is to blame for India not becoming a developed nation? It is the people. Our Government invests vast sums in setting up an airport every 50 days for them, but they refuse to fly:
Our Government invests vast sums in putting up metros in every city, but people won’t ride them:
Simply because the people lack purchasing power, they keep cramming into investment-starved public buses, which the Government is doing its best to close down:
Mumbai’s public bus transport, BEST, once considered a model bus service, is now a complete shambles. Yet this situation was foreseen and was publicly warned against over 7 years ago, when authorities decided to privatise BEST's core operations.https://t.co/h8iX1HIaxB
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