Forging the Indian Steel Industry: How Soviet Designs Won the Day

ABSTRACT

Indian politics tried to benefit from the competition between the two Cold War Blocs by gaining beneficial terms for economic cooperation and assistance. At times, Soviet and Central and Eastern European designs could prove more successful on the ground than their direct competitors from the West. This paper analyses cooperation schemes in the steel sector and scrutinises the reasons why this was the case. Economic cooperation between East and South was vibrant and could be mutually beneficial during the whole period of the Cold War, thereby calling into question a narrative of steady decline inherent in state socialism.

KEYWORDS:

• Council for Mutual Economic Assistance (CMEA)
• India
• Economic history
• East-South relations

The idea of unrestricted private enterprise is out of date [. …] The State has to come in the picture in a big way.¹

– Jawaharlal Nehru, first prime minister of independent India

There must be something deeper than mutual gain to explain the endurance and vitality of this friendship. Indeed there is. It is our abhorrence of imperialism, our struggle against colonialism and racism [. …] These principles transcend the difference in our historical background and in the political and social systems built by Lenin in your country and by Mahatma Gandhi and Jawaharlal Nehru in ours.²

– Rajiv Gandhi, Indian prime minister, at a banquet for Mikhail Gorbachev in New Delhi on 25 November 1986.

We have a Plan

The statements by both Jawaharlal Nehru and Rajiv Gandhi hint at the potential common ground between the Eastern Bloc, led by the Soviet Union, and the leadership of independent India. India, the former crown jewel of the British Empire, became independent in 1947. While the Cold War focused mainly on Europe in the late 1940s and 1950s, India was too large a country to be ignored indefinitely by the two sides of the Cold War. On the other hand, interacting with and trying to influence both the East and the West to gain political, military, or economic benefits was too tempting an issue to be brushed aside by the Indian leadership. This was the case for many other leaders of former colonies in the Global South as well, who were facing great difficulties administering their countries and improving the livelihood of their people. The economy provided ample opportunities to deliver tangible results of ‘progress’ to local populations.

Although the Indian independence movement had fought British imperialism, independent India could not nullify its colonial heritage overnight. The cultural, political, and economic spheres were partially shaped by British influence and path dependencies from the pre-independence period.³ The notion of non-alignment is often associated with Indian foreign policy after independence. Recent scholarship has pointed out that the term is somewhat misleading, at least for the late 1940s and 1950s. The approach to the foreign relations of independent India should rather be described as post-imperial.⁴ India did not cut its ties to Western Europe or the USA in the Cold War period, but tried to strengthen them and to form them according to the needs of the country as perceived by its elites.⁵ Britain – to make a case in point – remained the main foreign supplier of India’s army up to 1962.⁶ The US took over Britain’s economic and political role during the 1950s and provided US$12 billion in aid to South Asia between the mid-1950s and mid-1960s.⁷

The Soviet Union and its Eastern European satellites could never match these funds. Nevertheless, one cannot escape the impression that they played their cards well. The Soviet Union superseded Britain as the main provider of military materiel to India; a position retained after 1991 by Russia.⁸ On 1 September 1973, the US ambassador to India, Daniel Patrick Moynihan, stated the following about American influence on India: ‘The British Raj is over, the American demi-Raj is ending, and both have left interesting legacies.’⁹ By that time, the Soviet Union was about to overtake the US as India’s main trading partner. India never became a close ally of the Soviet Union. Neither had it ever been a close ally of the US or Britain in the Cold War period. Moynihan’s statement would oversimplify the complexities of Indian society and politics. Nevertheless, the Soviets and their Eastern European allies offered something to Indian elites that gave them (limited) competitiveness with their Western European and North American peers. What the Soviets had to offer was not so much ideological in a narrow sense, but very tangible. This did not only apply to military goods but to capital goods and economic development in general, as well.

The economic aspects of the Cold War in the Global South, although less visible than the so-called proxy wars, is the topic of this article. In the following pages, the example of the Indian steel industry is taken to analyse why and how designs originating from the Council for Mutual Economic Assistance (CMEA) countries could at times prove more successful on the ground than their direct competitors from the West. To what extent did the CMEA contribute to India’s development? For what reasons did these endeavours prove successful or not? At a closer look, West and East were not monoliths in the Cold War period; neither were Western or Eastern steel companies. Krupp and US Steel differed from each other to a certain extent as did Soviet Gipromez or Czechoslovak Škoda. Still, the West-East dichotomy is analytically valid for the purpose of this article for the following reasons: outside assistance in the formation of a public capital goods sector in India was seen as a direct competition between East and West by contemporaries. Furthermore, large investment projects – like building a steel factory – were executed by general contractors. Behind a general contractor stood a complex web of companies. This meant that Krupp had to manage a multitude of mainly Western European and North American sub-contractors, while Gipromez had to do the same with East European companies. This made the whole endeavour ‘Western’ or respectively ‘Eastern’ in a very direct sense despite the differences between the portfolios of single companies.

The term ‘design’ is used in a wide sense in this article. It is not limited to the outer form and colouring of an object – in this case a steel factory – but includes the technology used, the attitude to technology such as aspects of licensing and the (anticipated) interaction of the design in a wider sense with the user and the buyer. The category of ‘success’ is not regarded as an objective and timeless one in this article. Rather, it is seen as relative and time dependent. Therefore, ‘success’ is analysed in the categories used by contemporaries, foremost by actors from Indian society on the erection of public-sector steel plants in the Cold War period.

Both Western and Eastern companies tried to cooperate closely with Indian planners and politicians to advance their proposals. Despite a general lack of competitiveness in the states that made up the CMEA, Eastern Bloc state companies could win the day under the particular circumstances to be found in a country like India, where the latest sophisticated machinery did not always suit local needs best.¹⁰ This shows that economic cooperation between the East and the South was dynamic and could be mutually beneficial during the whole period of the Cold War, thereby questioning a narrative of steady decline inherent in state socialism. Although this article is, by and large, very supportive of the argument made by David Engerman, I argue that the Soviet Union and its partners retained some of their comparative advantages until the end. Trade relations between India and Eastern Europe during the 1980s do not support the narrative put forward by Engerman that decline in mutual (civilian) cooperation began in the early 1970s.¹¹

Patterns of transatlantic or East-West trade did not always apply in the same way to East-South or West-South trade. This led to communication problems between Western and Indian representatives that were not present in the same way with trade representatives and engineers from the Soviet Union or other European CMEA countries. Emissaries from Western countries had a poorly developed understanding for the political and social implications of state-sponsored attempts at rapid industrialisation. Furthermore, neither American nor British nor West German businessmen were necessarily culturally more sensitive in the post-war period than their Soviet counterparts. Issues, such as openly displayed racism, were not obstacles to reviving transatlantic trade in the 1950s and 1960s, but they could prove detrimental to establishing close economic ties with former colonies in the Global South. These ‘soft’ factors also played a role when the planning agencies of former colonies decided to award contracts to foreign companies. Having the best technology was an important factor, but not the sole one.

Loren Graham states in his book on the Russo-Soviet engineer Peter Palchinsky that the failure of the Soviet system was related not entirely to the deficiencies inherent to planned economies but also to the way in which technology was used.¹² The striving for the largest possible enterprise equipped with the most modern machines, combined with a neglect of small- and medium-sized companies as well as social factors, proved detrimental to the development of the Soviet Union.¹³ What was more or less true inside the Soviet Union did not necessarily apply to the Soviet planners and engineers dealing with the outside world. In India, they proved capable of working together with small (private) companies and of being a moderating influence in toning down the loftiest ambitions of their Indian counterparts. Nevertheless, they had a clear understanding of the political nature and multi-layered meaning of development projects that Western businessmen were clearly missing. This gave them a common base of appreciation with their Indian partners.

In this article, Western and Eastern projects will be compared. The erection of the steelworks in Rourkela, headed by a West German consortium, and in Bhilai, primarily a Soviet endeavour, were conceived of as competing projects by contemporaries in the late 1950s and early 1960s.¹⁴ The steel plant in Bokaro, while almost awarded to an American company, was eventually built in the 1970s by a Soviet state combine. Special attention is given to the erection of the Visakhapatnam steelworks in the 1980s, the last big project of the Eastern Bloc in the Indian heavy industry sector, bearing some resemblance to Magnitogorsk for its highly politicised nature.¹⁵ Regardless of the politics surrounding such projects, the building of steel factories in particular was not confined to a narrow circle of experts. The Indian public closely observed these projects. The story of the Soviet iron and steel industry, from being completely dependent on foreign technology in the 1920s and switching to domestic supplies in the 1930s, still impressed Indian experts and a wider audience in the late 1980s.¹⁶ Steel factories were regarded as the backbone of industrialisation and therefore of national progress because investments in heavy industry contributed to the capital stock of a country.¹⁷

A Common Understanding

What was remarkable about Indo-Soviet relations in the post-Stalin era was their resilience, surviving many changes in leadership.¹⁸ Prior to the mid-1950s, the Eastern Bloc’s economic cooperation with India had been of negligible importance for India’s development plans.¹⁹ The Indian National Congress, which became India’s ruling party upon independence, had already set up a Planning Commission in the late 1930s.²⁰ To overcome the perceived backwardness of the country was one of the central topics in Indian politics.²¹ Independent India’s first five-year plan, enacted in 1951, was not yet a comprehensive economic plan but a compendium of different investment projects, most of them dating back to the colonial era.²² The plan focused on agriculture, considering that 80 per cent of the Indian population lived in the countryside, and thus increasing the production of food was essential for any later industrialisation plans.²³

The first five-year plan was financed with the surplus that the British Raj had accumulated during the Second World War for its contribution to the British war effort, which later was passed on to independent India.²⁴ The focus changed with the second five-year plan, worked out under the supervision of Prasanta Mahalanobis – relying on the concept of industrialisation by import substitution – and comprised elements of William Arthur Lewis’s work.²⁵ The second and third five-year plans were successful according to the development principles prevailing in the 1960s, with the savings rate improving, a heavy industrial base being founded, and improvement in the agricultural sector taking place.²⁶ Nevertheless, in contrast to the first five-year plan, the second and third cost between two and three times as much and had to be financed on foreign credit to a considerable degree.²⁷ This necessitated negotiations between Indian representatives and emissaries from the Western and the Eastern Blocs alike.

These were not the only problems that came to light in the 1960s. Agriculture fell increasingly behind in its development compared to the industrial and service sectors. This was no coincidence; in following the economic ideas embodied by William Arthur Lewis, the neglect of agriculture and increasing urban-rural divide in India had structural reasons.²⁸ This neglect contributed to the emergence of famine conditions in the mid-1960s. Accepting food aid from the USA in exchange for the promise of currency devaluation was a humiliation for India, as the country’s leaders had been convinced that independence would do away with the spectre of the regular famines which were a characteristic under British rule. The so-called ‘Green Revolution’ that was initiated as a consequence in the mid-1960s improved the situation in the countryside and in the agricultural sector somewhat.²⁹ However, this did not mean a total break with the development paradigm of the late 1950s and early 1960s.

In the Cold War period, India followed an economic development strategy that can be described under the term ‘import substitution industrialisation’ (ISI). This was the development strategy preferred by most late industrialising countries to bridge the economic gap with Western Europe and North America. ISI’s main intellectual exponent in the Cold War period was Raúl Prebisch who held – among other positions in his career – the post of executive director of the Economic Commission for Latin America (ECLA).³⁰ Its intellectual origins, however, date back to the interwar period with a strong influence of Eastern European thinkers such as the Romanian economist Mihail Manoilescu.³¹ The main features of ISI were a focus on heavy industry, the use of high tariffs and quantitative trade restrictions, the use of planning techniques and policy interventions to discipline the business class and smooth out business cycles to the detriment of free markets. Substantial differences among countries pursuing an ISI strategy existed when it came to the role of the private and public sectors in fostering development, fiscal and monetary policy, policies towards the agricultural sector and the question what – if any – role should be carved out for foreign direct investment.³² Some of these features – like trade restrictions, state-led development and a focus on heavy industry – were not in direct opposition to the traits of the economic system prevalent in Eastern Europe during the Cold War period.

The strong role of the state and of state planning in the Indian economy resembled the economic approach of CMEA countries to a certain extent.³³ India had the reputation of being a socialist country in the Cold War period.³⁴ However, this did not mean that it was socialist in the Soviet sense. The central state was far from being able to dictate policies to the regional states. Although the central state had command over the Planning Commission and drafted five-year plans, its control over the economy was limited.³⁵ The role of the Planning Commission was solely advisory and private business retained a large role in economic life in India. Indian socialism was less state-centred and more decentralised than in Eastern Europe and depended on local initiatives.³⁶ What proved problematic in the Indian version of ISI was that the state was unable to ‘discipline’ private business to ensure the success of the development project pursued by the political leadership.³⁷ One of the reasons was the relatively toothless character of the Planning Commission, which was basically a mere ‘talking shop’ that could easily be ignored by business elites.³⁸ However, this does not dilute the value of the archives of the Planning Commission – which were used for this article – for historical analysis. The fact that it was primarily a forum for discussion means that its papers give valuable insights into discussions taking place among different stakeholders of Indian politics and society.

Despite the (limited) similarities of their economic systems, the CMEA countries found it difficult at first to abide by the rules of industrialisation by import substitution. Indian officials were insistent that their economic partners make use of Indian supplies as much as possible. Foreign currency or even clearing currency were only to be spent on products and services that could not be produced at home. Since production standards and the specifics of individual products could differ sharply, Indian technology was not easy to integrate into East German, Czechoslovak, or Soviet designs. What proved rather manageable in a brewery or dairy could turn out to be difficult to achieve in more complex branches of the economy like the steel industry.³⁹ The Indian government, on the other hand, saw clear advantages during the 1950s and 1960s in trading with the Eastern Bloc. Since the import of modern machines had to be paid for, the Indian government was looking for new export markets for Indian products. It focused on Eastern Europe because Eastern Europe was regarded as detached from the established world economic order, as noted in this Indian government briefing:

The Soviet Union and other East European countries came to our special attention. The emphasis on this region also derived from an additional but equally important factor. These countries belonging to a different economic, social, and political system had not yet become an integral part of the world economic system.⁴⁰

After the death of Nehru in 1964 and the short prime ministership of Lal Bahadur Shastri, who died in Tashkent during peace negotiations with Pakistan, Nehru’s daughter, Indira Gandhi, became Indian prime minister in 1966.⁴¹ The role of economic planning was maintained under her government. In her economic policies, she focused on the fight against poverty, which coincided with similar endeavours of the World Bank under Robert McNamara.⁴² However, the fundamentals of industrialisation by import substitution remained unchanged.⁴³ Her government even increased the role of the state in the economy.

Rourkela versus Bhilai

The second Indian five-year plan divided the economy mainly into two sectors: one producing consumer goods, the other producing capital goods. According to Mahalanobis, the main problem of the Indian economy was that it produced insufficient amounts of capital goods, which therefore had to be imported, making the country dependent on Western credits.⁴⁴ Despite the country being overwhelmingly agrarian, Indian economic planners could build on some pockets of industrialisation already present in the country. There were some basic steel factories, which could be used as the backbone for expanding capital goods production. Among them were privately-run steel factories like the Tata plant in Jamshedpur. These private companies active in the steel industry were not nationalised. However, the Industrial Policy Resolution of 1948 declared that the expansion of production in the capital goods sector – including metallurgy – should take place in the public sector.⁴⁵ India’s steel production, amounting to one million tons at the end of the Second World War, increased to three million tons in 1960 and six million tons in 1964.⁴⁶ Therefore, the economic plans worked out by Mahalanobis and his colleagues proved successful as the country’s industrial base was significantly expanded.

Some of the projects, particularly with regard to erecting steel plants, were highly contested for economic, social, and political reasons. Soviet engineers built two steelworks in India between the mid-1950s and mid-1970s in Bhilai and Bokaro. They were not the only ones to do so, as two other major public steelworks were erected during that time: one by the British in Durgapur and one by the West Germans in Rourkela, each of them with a planned capacity of one million tons annually.⁴⁷ These steelworks were meant to serve as showcases for their builders and were financed with assistance from the respective countries of origin.⁴⁸ While the steelworks of the mid-1950s had been built largely by foreign companies, it was increasingly the aim of Indian planners to let Indian companies contribute more to these projects. To make a case in point, Indian planners rejected Czechoslovak designs for a steel factory to be built in Ranchi in the 1960s because of its complexity, which was beyond the production capacity of Indian industries. This would have resulted in a permanent dependency on Czechoslovak deliveries of spare parts for the factory.⁴⁹

Soviet companies had built the steel plant in Bhilai almost at the same time as the one built by a West German consortium headed by the Krupp conglomerate in Rourkela. While the work of the Soviets went more or less according to plan, disaster struck the West Germans several times. Their problems were two-fold: moral and technical. The latter were related to the fact that their designs represented the state of the art of the steel business, often untested in practice, while the Soviets simply took designs from the 1930s, as used in many already existing Soviet steel plants. Although the Krupp consortium was able to start its blast furnace one day before the Soviets in Bhilai to score a propaganda victory, there were – in contrast to Bhilai – no facilities available to process pig iron. This led to several parts of the plant being damaged. The converters – delivered by Voest – broke down after reaching one-eighth of their expected period of usability. A total of 35,000 tons of unprocessed steel were blocking the construction site of the semi-finished plant before being transported to Kolkata by train, then to Germany by sea to be processed and back to India.⁵⁰

Moral issues were as difficult as technical problems. These moral issues mostly referred to the Germans’ relationship with women and alcohol and resembled colonial patterns as well. The state of Odisha, in which Rourkela was situated, was officially a dry state.⁵¹ The West German engineers and technicians therefore asked to be exempted from prohibition immediately after their arrival. The exemption was granted grudgingly by the Indian authorities for the whole district of Rourkela, to treat Indians and Germans alike. Furthermore, some Germans took mistresses, although prostitution was strictly prohibited in independent India. The West German magazine Der Spiegel wrote that young women came from as far as Kolkata after the news had spread.⁵² A ‘German Club’, which opened on the construction site, was exclusively for Germans and white people and offered sport activities as well as drinking parties, where drunken visitors would shove Indian waiters into the pool.⁵³

Apparently, the Soviets could acclimate better to local conditions. Soviet consultants and managers took care that their countrymen showed respect for the local culture and displayed no signs of either superiority or their comparatively high living standards. Symbolic actions proved decisive as well: when a Soviet delegation from Bhilai attended a cultural event in Rourkela, they sang Indian folksongs, reportedly leaving the audience in tears.⁵⁴ It is unlikely that Soviet engineers and craftsmen did not drink alcohol at all while working in India; however, they did not do so in public and did not introduce some kind of official ‘racial discrimination’ by building a ‘Soviet-only Club’.⁵⁵ In the West German press, the project of Rourkela had been ridiculed as ‘the Stalingrad of German industry’ for its many misfortunes.⁵⁶

Although the factory designed with West German engineering know-how could produce steel more efficiently than the Soviet factory in Bhilai, and also more efficiently than its British counterpart, purely economic input-output calculations were not all what the endeavour was about. More important than the latest Western technology and the highest economic efficiency were achievements that fit into the framework of industrialisation by import substitution, a situation that neither the West German engineers nor the German public seemed to understand. Der Spiegel offered an explanation, stating that the Soviets had sold the Indians outdated technology that they had received from Krupp in the mid-1930s, whereas the West Germans tried hard to design the world’s best steel plant for their Indian customers.⁵⁷ This argument promotes the conclusion that German technology won the day either way and that the Soviets were unable to develop a factory design on their own. However, such reasoning cannot conceal the fact that Krupp built a factory in the Indian jungle that was inadequate for the needs of its customer. To put it bluntly, the West German capitalists – represented by the consortium headed by Krupp – did not understand the Indian market as well as the emissaries of a planned economy, who had little experience in world trade.

It is important to avoid an ex-post perspective on the successes of the post-war West German economy on the world market. West German managers did not necessarily behave more prudently when dealing with the non-European world than their Soviet counterparts. The managers of the Wirtschaftswunder (economic miracle) were mostly graduates of ‘Speer’s kindergarten’ (named after Albert Speer, Nazi Germany’s armaments minister from 1942 to 1945). These men had learned in their 30s and 40s to command vast resources and ‘human capital’ in the war economy. The main representative of the West German consortium in Rourkela, Hans Heinrich, can serve as a case in point. Having finished his studies in Breslau (today Wrocław) in 1930, he quickly rose up the ranks of the Flick conglomerate, where he became the director of the Brandenburg steelworks. He managed the factory during the Second World War and was personally tasked by Speer to reorganise steel sheet production in Germany and the occupied territories to produce more tanks. His ‘successes’ during the War were proudly noted by the West German press, and it was emphasised that he was down-to-earth and had played football in his youth.⁵⁸ However, no one asked about the price in human suffering to increase steel sheet and tank production, particularly in Germany’s occupied territories. It is probably justified to assume that these engineers, who had thousands of slave labourers worked to death under their command, were not particularly skilled cultural mediators.⁵⁹

Furthermore, the Soviets put much greater emphasis on training Indians on the construction site as well as in the Soviet Union. While the West German companies feared of losing their intellectual property, prospective Indian engineers could learn close to anything about the achievements of Soviet metallurgy.⁶⁰ Indian experts expressed a mixed judgement when comparing the technological level of the Soviet designs with that of the West German, with both being considered superior to the British plant in Durgapur.⁶¹ Another point that was easily overlooked by Western observers is that Soviet steel factories required a large input of unskilled labour when compared to Western European designs.⁶² What may seem a disadvantage to Western eyes could prove advantageous from the perspective of Indian politicians and economic planners, since Soviet steel plants promised not only a material industrial base but also a path forward to rapidly expand the industrial workforce and to provide jobs for young people from the countryside in an environment of fast population growth.⁶³ When the Indian government tried to expand the Rourkela factory’s capacity in the late 1960s from 1 to 1.8 million tons, Indian planners could hardly make sense of the West German designs, and the costs of expanding the factory were almost as high as building it, including its iron ore mine and neighbouring planned city of Rourkela. Even after the expansion, annual production in Rourkela did not exceed 1.1 million tons.⁶⁴ In the end, the Indian planners had to recruit West German engineers again, which meant a loss of face since such a move was at odds with the requirements of industrialisation by import substitution.⁶⁵ Expanding the Soviet steel factory in Bhilai to 2.5 million tons annually at the same time proved much easier to accomplish for Indian planners. Bhilai’s performance was considered best among all public-sector steel plants.⁶⁶ By contrast, the plant in Rourkela ran a deficit until 1974.⁶⁷ Furthermore, unlike at Rourkela, labour relations were rather peaceful in Bhilai.⁶⁸

Bokaro and Trade Patterns to the 1980s

The Soviets could repeat their success later in Bokaro, thereby even outmanoeuvring American competitors. The decision to build a steel plant in Bokaro and to incorporate the project into the third five-year plan was taken by the Indian cabinet on 10 June 1960. When faced with the choice to either build another steel factory or to use the funds for investments in agriculture and small-scale industry, the cabinet opted for the former, although the Planning Commission had recommended the latter.⁶⁹ The Soviets submitted their detailed project report for a plant able to produce four million tons annually in December 1965.⁷⁰ The Soviet designs competed against a factory proposal by US Steel and an Indian company named Dasturco. Interestingly, the Soviet proposal contained the highest share of Indian supplies, higher than the designs by the domestic company. Whereas Dasturco’s engineers envisioned the share of domestic supplies to be 30 per cent, the Soviet designs planned for nearly 65 per cent.⁷¹

This also meant that the share of imports was comparatively small in the Soviet proposal for the plant. The Soviet plans proposed imports worth US$200 million; Dasturco meanwhile planned imports amounting to US$318 million, and US Steel calculated US$512 million.⁷² In addition, the Soviet offer was attractive because trade was settled by clearing accounts. Thus, the credit did not have to be paid back in US dollars but with Indian goods. This all contributed to the Indian government signing a treaty with the Soviets in the mid-1960s.⁷³ The American option had vanished, in any case, due to the reluctance of the Kennedy and Johnson administrations to back a project that would significantly expand the Indian state sector.⁷⁴ The Soviet engineers did not use the most sophisticated technology for their designs, and the production costs per unit of output were larger than for similar projects in Britain and Japan that were constructed at roughly the same time.⁷⁵ As was the case with Krupp in Rourkela, the designs by US Steel most likely would have led to lower production costs per unit of output, but efficiency was not the sole objective of the industrialisation by import substitution strategy. The Soviet designs saved foreign exchange and used local industrial know-how to a large degree. Besides this, the high operating costs of the plant were also directly related to the fact that Indian supplies were used extensively, since these were not necessarily the most efficient supplies available on the market either.⁷⁶

An internal report about Bokaro by the Planning Commission stated that up to 80 per cent of the equipment was produced by Indian manufacturers, many of which had never produced metallurgical equipment before. As can be expected in such a large project, this led to many problems since it was a truly Herculean task to coordinate so many different suppliers, most of which had no experience in the field of machine-building and steel-making.⁷⁷ Nevertheless, as was the case in Bhilai, the later expansion of the steel plant in Bokaro was comparatively easy to achieve at modest costs for the Indian planning authorities.⁷⁸ Much of the design for expanding Bokaro was done by Indian engineering consultants. Only the most complex parts were manufactured either in the Soviet Union or in India according to Soviet plans. The Indian authors of a document on the development of engineering services in India wrote about the importance of a cooperation agreement with the Soviet State Institute for Planning Iron and Steel Works (Gipromez):⁷⁹

Through collaboration agreement in 1969 with GIPROMEZ […] the Indian consultancy was enriched further and today the know-how of detailed engineering of a steel plant is no more Greek to India. Bokaro Steel Plant is a major landmark in the development of the Indian iron and steel industry.⁸⁰

The focus of Indian planning changed in the 1970s, considering that an industrial base had already been established by the late 1960s. This meant that the Soviets had to adapt their export offers if they wanted to enjoy close trade relations with India in the future.⁸¹ This proved more difficult for them than for some of the (geographically) smaller members of the CMEA, like East Germany, which exported equipment for branches of the economy that had a more steady demand, such as equipment for printing presses.⁸² Indian and Soviet officials concluded treaties on joint production whereby the Soviets would deliver raw materials to be processed in India and then exported to the Soviet Union again.⁸³ But this proved insufficient to stabilise or expand trade in the 1970s.

To counter this trend, the Soviet leadership decided to export crude oil to India. This was extraordinary for two reasons: first, according to the clearing agreement, the Soviet Union did not receive foreign exchange in return; second, the Soviet leadership was simultaneously curtailing oil deliveries to Eastern and Central Europe.⁸⁴ It could be suggested that the Soviet leadership therefore valued its ties with India higher than with its European allies. Soviet trade with India was unique because it was the only country in the Global South from which it mainly imported manufactured goods in return for raw materials, a trade pattern that was more common in the Soviet trade with the West. Political relations between the Soviet Union and India improved in the 1970s, particularly after the Treaty of Peace, Friendship and Cooperation had been signed in 1971.⁸⁵ These efforts were not limited to the Soviet Union, with ways to improve economic ties with India being repeatedly discussed in the CMEA from the early 1970s on.⁸⁶

The Long Road to Visakhapatnam

One year after Mikhail Gorbachev had become general secretary of the Communist Party of the Soviet Union in 1985, CMEA countries revised their existing India programme. As a result, there was a rational push towards multilateral cooperation.⁸⁷ India was one of Gorbachev’s focus countries in the Global South.⁸⁸ One of the cooperation projects was a prospective steel plant in Visakhapatnam. The plant was to have an annual capacity of 3.2 million tons of steel and to be erected as a joint project of the Soviet Union, Czechoslovakia, East Germany, Poland, Romania, Bulgaria, and Hungary.⁸⁹ Czechoslovakia and East Germany in particular had already played a modest role as suppliers for the Bhilai and Bokaro projects.⁹⁰ By the early 1980s, Indian planners anticipated a huge gap between supply and demand for steel. Steel production, which stood at 14 million tons annually in the early 1980s, was planned to expand to 45 million tons by the year 2000.⁹¹ This plan once again provided ample opportunity for the heavy industry sector of the Eastern Bloc. Indian experts were making unflattering comparisons between the state of their steel industry and of the ones in countries like Brazil or South Korea, as exemplified in a letter from M.N. Dastur, the founder of Dasturco, to P.N. Dhar, principal secretary to Indira Gandhi.⁹² The ideological underpinning for fruitful economic cooperation between India and the socialist East was still intact in the mid-1980s under the government of Rajiv Gandhi, who had followed his mother into office after her assassination in 1984.

Visakhapatnam was meant to repeat the successes in Bhilai and Bokaro. However, the fact that the Soviets so actively sought cooperation with all other European members of the CMEA for this project could be interpreted either as a sign of weakness or as a sign of a new spirit of cooperation. Most likely it was a mixture of both. While the Soviet economy, on average, was still more productive than the Indian one in the 1980s, the Soviets found it difficult to export their own equipment in exchange for non-traditional Indian goods. Cooperation, particularly with the more advanced CMEA countries on its Western periphery, therefore promised to overcome this deficiency of the Soviet export economy. In the end, this could work out as a win-win situation for all parties involved, since it meant more business for East German and Czechoslovak state combines, as well as for Soviet ones.⁹³ Even the early steel projects in India would have been impossible without Czechoslovak and Polish help.⁹⁴

Internal Indian government documents give valuable insight into the decision-making process. Negotiations over the steel factory in Visakhapatnam predated the election of Gorbachev as general secretary. The Public Investment Board was discussing the project as late as 1979.⁹⁵ In the same year, an Indian delegation travelled to Moscow for negotiations.⁹⁶ Building another large public steel plant was already a contested issue in 1970, prior to the general elections that took place in 1971.⁹⁷ Indira Gandhi’s government had announced the decision to build a steel factory in the Visakhapatnam area in April 1970 without any plan being worked out on the feasibility of such a project.⁹⁸ This makes it likely that the decision was foremost a political one, the more so since the government had announced the building of another steel plant in Karnataka in the south of India on the same day.⁹⁹ Accordingly, this was seen as a promise of regional development which could uplift the standing of the Congress Party in Southern India’.¹⁰⁰ Visakhapatnam was located on the eastern coast of India and already contained a harbour that could be used for imports and exports. Nevertheless, the location had serious deficiencies concerning the establishment of a steel factory, since the deposits of vital resources were far away. The coal deposits were 1,007 km, the iron ore deposits 768 km, and limestone deposits 455 km away from the planned factory site.¹⁰¹

The foundation stone was laid by Indira Gandhi in 1971, but besides that not much happened after the announcement. At its session on 24 October 1973, the Public Investment Board asked Dasturco, which had also played a role in the Bokaro project, to prepare a detailed project report for the future steel plant.¹⁰² The plans were beginning to take shape in the late 1970s. By that time, India had to increase its imports of steel, since domestic production proved insufficient to keep up with demand. As steel imports were costly and had to be paid with foreign exchange, the pressure on the planning authorities was increasing. This followed the logic of import substitution. According to the files of the Planning Commission, India’s steel output per capita stood at 14 kg in the late 1970s, which was a mere 2 per cent per capita compared to the most ‘advanced’ countries. Indian authorities were planning to import 1.74 million tons of steel in 1979 for Rs 550 crore. Erecting a new domestic steel plant would therefore save foreign exchange and boost the capital stock of the country, which in turn promoted social and economic development.¹⁰³

The total planned investment costs for the steel plant in Visakhapatnam were estimated at Rs 2693.5 crore (roughly US$3.2 billion in 1979).¹⁰⁴ Therefore, under the strict assumption that no additional imports were needed to run and maintain the factory, the project would have paid for itself after five years, at least if one looked from the ideological point of view of industrialisation by import substitution. This line of thought appeared even more comforting considering that the factory should produce not 1.74 but more than 3 million tons of saleable steel annually. However, such a calculation, even if often applied under such an economic development scheme, is highly dubious. This would have demanded two completely separate economic cycles, one for the domestic economy and another for foreign trade, not intertwined with each other. In reality, such separate systems did not exist, neither in the Eastern Bloc nor in India.

The Indian planners wanted the Soviets to implement the most advanced blast furnaces that were produced in the Soviet Union and were already reliably tested. However, the latest Soviet blast furnaces demanded the use of coking coal with a very low ash content. This resulted in additional Indian investments, since Indian coal had to be purified to be used in this process.¹⁰⁵ Furthermore, there were opportunity costs for the project. The harbour in Visakhapatnam had been built to export iron ore. Diverting the iron ore for domestic use in the proposed steel plant meant that large parts of the harbour would remain unutilised and that the previous investments were in vain. The discrepancy amounted to several million tons of iron ore annually.¹⁰⁶ It was clear to the economic planners that Visakhapatnam was not the location best suited for a steel factory; due to the long distances between the prospective plant and the resource deposits, it would cost an additional Rs 33.5 crore per annum to produce steel in Visakhapatnam compared to a similar facility in Bengal, Bihar, or Odisha.¹⁰⁷

At the 107^th meeting of the Public Investment Board on 24 May 1979, the secretary of steel brushed the concerns of the Planning Commission aside and stated that further expanding the factories in Bhilai and Bokaro or building a new one in this area was unfeasible because such a large plant would be unmanageable and not enough raw materials could be transported.¹⁰⁸ He also contradicted the findings of the Planning Commission by stating that the use of higher quality iron ore would make steel production in Visakhapatnam as economical as in Bokaro or Bhilai.¹⁰⁹ The experts of the Planning Commission had clearly stated in their analysis that this would not substantially alter the picture. The secretary of steel reacted the same way when asked whether the plant would be prone to tropical storms like cyclones by saying that adequate care would be taken, but without naming any details.¹¹⁰ It was clear that the politicians overrode the economic experts. The factory had to be built – not because it was efficient to do so, but because steel imports had to be curtailed and the development of the southern regions had to be advanced.¹¹¹ The problems revolving around this decision were critically discussed in the Indian public as well.¹¹²

It is interesting to note that back in May 1979 when the Public Investment Board made its decision, the Janata government under Prime Minister Morarji Desai was still in place.¹¹³ The project was associated with Indira Gandhi’s government. Therefore, when the Janata Party came to power, its leadership was not too fond of executing the projects of the former government. But they were experiencing severe resistance from inside their own party. Tenneti Viswanathan, the head of the Janata Party in Andhra Pradesh, the state of the prospective steel plant, wrote a letter to Desai in April 1977, cautioning against any swift action.¹¹⁴ His letter to the minister of steel, Biju Patnaik, was more direct:

I am sorry to see the statements made by you and some of your officers that the Visakhapatnam Steel Plant would be shifted. The grounds advanced are that the site is not the best; that it was chosen for political considerations and that it was an Election matter. None of the grounds have any base [. …] Change of Ministers should not mean change in well considered plans and projects.¹¹⁵

There had already been a public struggle prior to the announcement of Indira Gandhi’s government in 1970 to build another public steel plant in Visakhapatnam. Agitation to build a steel plant in Visakhapatnam led to riots in the mid-1960s, which were stopped violently by the police. A total of 32 people were left dead, and several hundred wounded.¹¹⁶ One of the activists, T. Amrutha Rao, went on a hunger strike in 1966, and he threatened to do so again in a letter to the minister of steel in 1977.¹¹⁷ Thus, the costs for the Janata government in Delhi were too high to change course. The erection of the prospective steel plant remained an important political as well as economic issue when the Congress Party under Indira Gandhi returned to power following the general election of 1980. The grip of the Congress Party on Andhra Pradesh was tenuous in the 1980s. The Congress Party won the national elections of 1984 in a landslide following the assassination of Indira Gandhi, and her son Rajiv could easily form a new government. However, in Andhra Pradesh, Rajiv Gandhi’s party lost the majority of seats to the Telugu Desam Party led by the actor Nandamuri Taraka Rama Rao. His party was the largest opposition in the Indian parliament (Lok Sabha) after the 1984 elections. This elevated the state’s political status and made it politically prudent for the Congress-led central government to win back the favour of Andhra Pradesh’s voters. None of the available CMEA documents show that the full complexity of the projects and its contested political background were known to the Eastern economic planners. Activists like Rao, who spearheaded the slogan ‘Visakha Ukku Andhrula Hakku’ (‘Visakha’s Steel, Right of Andhras’), are still celebrated for their dedication to the steel factory.¹¹⁸

Problems in the Field and New Forms of Multilateralism

The final treaty for Visakhapatnam was complicated, since so many parties were involved in building the factory, including both Indian and foreign actors. The East German heavy machinery combine Ernst Thälmann (SKET), to make a case in point, was delivering equipment to India for the steel plant and supervised a small part of the assembly. The treaty was concluded by August 1987, and Czechoslovakia and East Germany had to finish their deliveries by August 1989. Afterwards they had to provide services for the assembly and commissioning of the factory by the end of 1991.¹¹⁹ All in all, the obligations of the East Germans amounted to US$15 million, including the delivery of spare parts for their equipment and assembly services by experienced engineers. East Germany charged about US$20 per hour for its consulting services, which was most likely less than a Western engineer would have demanded but more than an East German engineer received as a salary.¹²⁰

The East German combine SKET was a subcontractor of the Czechoslovak combine Škoda for some of the deliveries; for others, it concluded direct contracts with the Indian state company Vizak Steel, which was to build and run the factory or one of its subsidiaries.¹²¹ SKET, however, could not produce all of the equipment by itself, nor was it able to procure the equipment it needed from inside the Eastern Bloc. This could only partially be accomplished with imports from the Soviet Union and Romania.¹²² SKET had to rely on importing West German technology, which made up more than 25 per cent of the money SKET could hope to obtain from the Indians.¹²³ This represents just a fraction of the complexity of the project, since Czechoslovak and Soviet documents would probably expand the map of suppliers much further. With a certain degree of resignation, an East German report on the project stated,

First plant-typical symptoms like

- delays in delivering the assembly instructions by SKET

- problems in timely shipping by SKET till 31.12.1988

allowed already back in February to draw the conclusion that we have to anticipate critical and expensive legal consequences again.

The delays in realizing the object are the fault of all partners involved and are estimated at six months¹²⁴

Therefore, the minister for foreign trade in East Berlin, Gerhard Beil, feared that the East German industry could not abide by the original treaty. Since Visakhapatnam was a reference project for CMEA countries, this demanded an emergency meeting on the ministerial level in June 1989.¹²⁵ Some of the deliveries shipped from Rostock to Mumbai disappeared for unknown reasons in the harbour of Mumbai, which led to quarrels with the Indian partners at the construction site, in this case Mukand Iron and Steel Works, because the equipment was urgently needed for the assembly.¹²⁶ Interestingly, the main company responsible for the Visakhapatnam steel plant asked SKET to ensure that the Indian company Mukand Iron and Steel Works would be able to speed up its work.¹²⁷ Although SKET and Škoda were only responsible for the middle steel rolling mill, which was just a part of the factory, their deliveries made up 38.8 per cent of the equipment needed. The other 61.2 per cent was to be produced by Indian companies according to Czechoslovak and East German blueprints and instruction.¹²⁸

The cooperation between SKET and Škoda was also prone to misunderstandings and mistakes. SKET needed special plunger pumps for its own designs to be delivered by Škoda. Although SKET and Škoda had concluded the treaty in July 1987, nearly two years before the deliveries had to be made, Škoda could not comply with the treaty, instead offering to deliver the pumps by late 1990. The representatives of SKET could not convince their colleagues from Škoda to deliver the equipment earlier. They therefore turned to other potential partners outside the Bloc and concluded a treaty with an Austrian company. However, this meant payments in a Western currency. From a business perspective, the initiative presented by the directorate of SKET was sensible. Since they did not want to threaten the success of the whole project, they turned to other companies in the market. This angered the East German Governmental Commission for Uniformly Steering Import and Export (RKEI) and foremost its head, Beil, for several reasons. First, foreign exchange had to be spent. Second, this move allowed the Indians and Czechoslovaks to blame SKET if anything went wrong, whereas otherwise SKET could have blamed Škoda for delays. And third, the Indians had to pay with foreign exchange themselves not just once but repeatedly for the spare parts. The RKEI therefore anticipated that the Indian side would have liked the contract with Škoda to remain in place even if it meant delays. This was the logic of industrialisation by import substitution.¹²⁹

Conclusion

The findings in this article underline that a master narrative of steady decline and erosion of competitiveness in the East during the Cold War hides more than it reveals. What may be true from the perspective of East-West trade does not necessarily apply to East-South trade, where – until the 1980s – nationalist governments pursued economic strategies that differed from the West. Western companies at times proved unable and too inflexible to take the interests of a ‘developing country’ like India into account. This was as true in the 1950s in Rourkela as it was true in the 1980s when Indian planners were negotiating with the German conglomerate Mannesmann and the British company Davy McKee for a coastal steel plant rivalling the Visakhapatnam project.¹³⁰ Both were unwilling to merge their design concepts with the Indian ones as well as to take up the entrepreneurial risk of such a task. One could have expected companies hardened by free market competition to grasp the opportunity. On the contrary, it was Soviet engineers and planners who did so.

Soviet representatives demonstrated unexpected flexibility when dealing with Indian demands and wishes. They demonstrated an attitude to intellectual property rights that suited the needs of Indian planners. Furthermore, their equipment was technologically advanced enough to be considered for industrialisation projects. The production technologies used demanded less skilled workers, which were relatively scarce in India. First and foremost, Soviet engineers were ready to incorporate Indian machinery in their designs and to hand their blueprints over to their Indian counterparts – which meant a transfer of know-how and allowed the Indian government to save foreign exchange, which was also scarce. As time proceeded, the projects undertaken in the Indian steel sector became more and more complex, with Soviet planners gradually processing more input from the Indian side and from state combines in the smaller European CMEA countries.

Not every project of economic cooperation between the Eastern Bloc and India during the Cold War became a success story. There are sufficient examples of failures, such as the Barauni oil refinery, which could process neither Indian nor Gulf oil, or the Surgical Instruments Factory in Madras, which could only turn out cutlery.¹³¹ Nevertheless, a surprising number of the factories built are still operating today and have survived the breakdown of industrialisation by import substitution in India, which occurred at roughly the same time as the dissolution of the Soviet Union.¹³² These are mainly large-scale projects in the heavy industry sector, like Bharat Heavy Electricals, the revenues of which amounted to over US$4 billion in 2016, and the public-sector steel plants like Bhilai, Bokaro, and Visakhapatnam. These plants survived the economic opening up of India in the 1990s, although they were not designed by Krupp or US Steel. However, only a fraction of the economic relationship between the East and India survived the turbulences of the 1990s as well.¹³³

The Cold War period provided a peculiar setting for East-South cooperation and economic development owing to several factors. In the case of the relations between India and CMEA countries, these were the following: foremost a common understanding that industrialisation by import substitution served national interests best. Creating an industrial base that prioritised the generation of jobs for young migrants from the countryside was seen as a superior strategy to one that focused on maximising capital productivity. The cooperation scheme between CMEA countries and India underlying these factors worked best in the heavy industry sector, where CMEA countries had ample experience in creating jobs for low- and mid-skilled migrants from the countryside. It did not work well in the light industry sector or in all knowledge-based branches of the economy. The anti-colonial attitude of the Soviet leadership certainly helped in creating a political atmosphere favourable to cooperation schemes in the Cold War period.

Notes

¹ As cited in Odd Arne Westad, The Global Cold War. Third World Interventions and the Making of Our Times (Cambridge: Cambridge University Press, 2005), 81.

² As cited in Peter J.S. Duncan, The Soviet Union and India (London: Routledge, 1989), 12.

³ Taylor C. Sherman, Nehru’s India. A History in Seven Myths (Princeton: Princeton University Press, 2022), 21–2.

⁴ Ibid., 23–4.

⁵ Ibid., 25–7.

⁶ Paul M. McGarr, The Cold War in South Asia: Britain, the United States and the Indian Subcontinent, 1945–1965 (Cambridge: Cambridge University Press, 2013), 217

⁷ Ibid., 3.

⁸ See ‘India remains biggest arms importer between 2018–22 despite drop in overall imports’, The Hindu, 13 March 2023 [accessed on 24 March 2023 at https://www.thehindu.com/news/national/india-remains-biggest-arms-importer-between-2018-22-despite-drop-in-overall-imports/article66614120.ece#:~:text=India’s%20arms%20imports%20(2018%20%2D%202022,United%20Kingdom%202%25%20Germany%201.4%25&text=%E2%80%9CIndia’s%20tensions%20with%20Pakistan%20and,its%20demand%20for%20arms%20imports].

⁹ Cited in McGarr, The Cold War in South Asia, 1.

¹⁰ Founded in 1949, the CMEA was the main institution for economic cooperation inside the Eastern Bloc.

¹¹ See David C. Engerman, The Price of Aid: The Economic Cold War in India (Cambridge, Massachusetts: Harvard University Press, 2018).

¹² See Loren R. Graham, The Ghost of the Executed Engineer: Technology and the Fall of the Soviet Union (Cambridge, Massachusetts: Harvard University Press, 1993).

¹³ Ibid., 36.

¹⁴ Corinna R. Unger, ‘Rourkela, Ein Stahlwerk Im Dschungel: Industrialisierung, Modernisierung und Entwicklungshilfe im Kontext von Dekolonisation und Kaltem Krieg (1950–1970)‘, Archiv für Sozialgeschichte 48 (2008), 371.

¹⁵ I want to thank Hari Vasudevan and Amit Das Gupta in particular for their advice on the archival situation in India.

¹⁶ See, for example: ‘Soviet Collaboration in Indian Steel Industry, 1954–84’, Economic & Political Weekly, October 1988, 473–86. Economic and Political Weekly is one of the most internationally acclaimed Indian economic periodicals.

¹⁷ Sugata Bose, ‘Instruments and Idioms of Colonial and National Development: India’s Historical Experience in Comparative Perspective’, in Frederick Cooper and Randall Packard, eds., International Development and the Social Sciences: Essays on the History and Politics of Knowledge (Berkeley: University of California Press, 1997), 52–5.

¹⁸ Andreas Hilger, ‘Revolutionsideologie, Systemkonkurrenz Oder Entwicklungspolitik? Sowjetisch-indische Wirtschaftsbeziehungen in Chruschtschows Kaltem Krieg‘, Archiv für Sozialgeschichte 48 (2008): 391.

¹⁹ Vasant Sukhatme, ‘Assistance to India’, in Anne O. Krueger et al., eds., Aid and Development (Baltimore: Johns Hopkins University Press, 1989), 204–5.

²⁰ Bose, ‘Instruments and Idioms‘, 47.

²¹ Corinna R. Unger, Entwicklungspfade in Indien: Eine Internationale Geschichte 1947–1980 (Göttingen: Wallstein, 2015), 8–10.

²² Engerman, The Price of Aid, 92.

²³ Unger, Entwicklungspfade, 20.

²⁴ Michael Mason, Development and Disorder: A History of the Third World since 1945 (Hanover: University Press of New England, 1997), 269.

²⁵ Prasanta Chandra Mahalanobis (1893–1972) was an Indian scientist who later became a leading member of India’s Planning Commission. He spent part of his years as a student in Cambridge, where he met other gifted Indian students, such as Srinivasa Ramanujan. Back in India, he became one of the founders of the Indian Statistical Institute; Bose, ‘Instruments and Idioms’, 53–54.

²⁶ Ibid., 54.

²⁷ Mason, Development and Disorder, 270.

²⁸ I thank my anonymous reviewers for pointing this out. Lewis received the Nobel Prize in Economics in 1979, the same year as his antipode Theodore Schultz, who had strongly criticized the neglect of agriculture and education in favour of more tangible capital in his academic work.

²⁹ Engerman, Price of Aid, 243–59.

³⁰ John Waterbury, ‘The Long Gestation Period and Brief Triumph of Import-Substituting Industrialization’, World Development 27 (1999), 323.

³¹ See Joseph L. Love, ‘Theorizing Underdevelopment: Latin America and Romania, 1860-1950’, Estudos Avançados 4 (1990).

³² Waterbury, ‘Long Gestation’, 323–6.

³³ Jeffry A. Frieden, Global Capitalism: Its Fall and Rise in the Twentieth Century (New York: Norton, 2007), 314–5.

³⁴ Sherman, Nehru’s India, 85–7.

³⁵ Ibid., 89–92.

³⁶ Ibid., 117.

³⁷ Vivek Chibber, Locked in Place. State-Building and Late Industrialization in India (Princeton: Princeton University Press, 2003), 9–12.

³⁸ Ibid., 29–43.

³⁹ ‘Informatsionnyi material ob ob“mene mneniiami po nekotorym voprosam okazaniia ekonomicheskogo i technicheskogo sodeistviia razvivaiushchimsia stranam, v chastnosti oplaty okazannogo tekhnichekogo sodeistviia postavkami gotovykh izdelii, sakliucheniia otraslevykh soglashenii o chastichnom razdelenii truda i t.p., RGAE, Fond 561 op. 53 d. 18 ll. 201–4; ‘Austausch der Arbeitserfahrungen über die wichtigsten Fragen der Tätigkeit der AHO im Zusammenhang mit der Gewährung von technischer Unterstützung an Entwicklungsländer beim Bau von Industriebetrieben und anderen Objekten im Zeitraum vom Dezember 1964 bis April 1965’, 1965, RGAE, Fond 561 op. 53 d. 13 ll. 59–61.

⁴⁰ ‘India’s trade links with the USSR and other East European Countries’, undated (likely 1977), National Archives of India (NAI), List No. 258 S. No. 654 WI/205/5/77 (EE).

⁴¹ After the death of Nehru as well as after Shastri’s death, Gulzarilal Nanda served as interim prime minister for a few days.

⁴² See Martha Finnemore, ‘Redefining Development at the World Bank’, in Cooper and Packard, International Development and the Social Sciences, 203-27.

⁴³ Bose, ‘Instruments and Idioms‘, 55.

⁴⁴ Unger, Entwicklungspfade, 155.

⁴⁵ Engerman, Price of Aid, 81–2.

⁴⁶ Unger, Entwicklungspfade, 158.

⁴⁷ ’Approach Paper on Development of Consultancy, Design and Engineering Services in India’, 1982, NAI, List No. 249 S. No. 232 PAD/22-3 (2)/82.

⁴⁸ Padma Desai, The Bokaro Steel Plant: A Study of Soviet Economic Assistance (Amsterdam: North-Holland, 1972), 45.

⁴⁹ Ibid., 18.

⁵⁰ These examples are taken from ’Russen auf dem Dach’, Der Spiegel14 (1960), 22–34. For discussion of technical problems, see also Unger, ‘Rourkela’.

⁵¹ Selling and consuming alcohol was forbidden in Odisha.

⁵² ‘Russen auf dem Dach‘, Der Spiegel, 14 (1960), 22–34.

⁵³ Ibid.

⁵⁴ ’On the Desecration of Nehru’s‚ Temples: Bhilai and Rourkela Compared’, Economic & Political Weekly 19 (2008), 47–57.

⁵⁵ On the planning process, the living conditions in the new ‘steel towns’, and how this amplified ’communal’ tensions, see Srirupa Roy, Beyond Belief: India and the Politics of Postcolonial Nationalism (Durham: Duke University Press, 2007), 133–56.

⁵⁶ ‘Rourkela Sieg der Deutschen‘, Der Spiegel 3 (1966), 68–70.

⁵⁷ ‘Russen auf dem Dach‘, Der Spiegel, 14 (1960), 22–34.

⁵⁸ Ibid.

⁵⁹ Hans Heinrich was awarded a Federal Cross of Merit in 1961 for his activities in West German–Indian relations.

⁶⁰ ’On the Desecration of Nehru’s ‚Temples: Bhilai and Rourkela Compared’, Economic & Political Weekly 19 (2008), 47–57.

⁶¹ ‘Soviet Collaboration in Indian Steel Industry, 1954–84’, Economic & Political Weekly 10 (1988), 473–486.

⁶² Clark M. Gardner, The Economics of Soviet Steel (Cambridge, Massachusetts: Harvard University Press, 1956), 61–6.

⁶³ Aleksandr P. Kolontaev, Problema Zaniatosti v razvivaiushcheisia ekonomike: Opyt nezavisimoi Indii (Moscow: Nauka, 1988), 155–7.

⁶⁴ ‘Action Committee on Public Enterprises Rourkela Steel Plant – Hindustan Steel Limited Summary of Report’, 1978, NAI, List No. 183 S. No. 100 PAD/1-206/74.

⁶⁵ ‘Action Committee on Public Enterprises Rourkela Steel Plant – Hindustan Steel Limited Summary of Report’, 1978, NAI, List No. 183 S. No. 100 PAD/1-206/74; memos of the Planning Commission on the expansion of the Rourkela Steel Plant, 28 January 1975 and 29 June 1978, NAI, List No. 183 S. No. 100 PAD/1-206/74.

⁶⁶ ‘Debottlenecking and technological upgrading of 1.5 MT stage of Bhilai Steel Plant’, 1984, NAI, List No. 249 S. No. 328 PAD/22-1 (5)/84.

⁶⁷ Unger, ‘Rourkela’, 383–84.

⁶⁸ ’On the Desecration of Nehru’s ‚Temples: Bhilai and Rourkela Compared’, Economic & Political Weekly 19 (2008), 47–57.

⁶⁹ ‘Meeting of the Cabinet held on friday, the 10^th June, 1960 at 4 p.m.’, 1960, NAI, List No 183 S. No. 21 65/2/CF-60 (Part III) Vol. III.

⁷⁰ ‘Debottlenecking and Technological Upgradation of Bokaro Steel Plant’, undated, NAI, List No. 249 S. No. 328 PAD/22–1 (5)/84.

⁷¹ Desai, Bokaro Steel Plant, 43.

⁷² Ibid., 46.

⁷³ Ibid., 51.

⁷⁴ Ibid., 28–31.

⁷⁵ Ibid., 52–58, 75–76.

⁷⁶ Ibid., 75–76.

⁷⁷ ‘Debottlenecking and Technological Upgradation of Bokaro Steel Plant’, undated, NAI, List No. 249 S. No. 328 PAD/22-1 (5)/84.

⁷⁸ ‘Summary Record of the 78^th Meeting of the Public Investment Board held on 26.09.1977’, 1977, NAI, List No. 183 S. No. 175 PAD/24-2 (12)/75; ‘Bokaro Steel Expansion to 4.0 MT/4.75 MT of ingot steel – Note on Economic Viability’, 1977, NAI, List No. 183 S. No. 175 PAD/24-2 (12)/75.

⁷⁹ Gipromez was founded in 1926 to coordinate the collaboration with American and European engineers who helped expand the Soviet industrial base in the late 1920s and 1930s.

⁸⁰ ‘Approach Paper on Development of Consultancy, Design and Engineering Services in India’, 1982, NAI, List No. 249 S. No. 232 PAD/22-3 (2)/82.

⁸¹ ‘India’s trade links with the USSR and other East European Countries’, 1977, NAI, List No. 258 S. No. 654 WI/205/5/77 (EE).

⁸² See the annual reports of the East German trade representative to New Delhi, Barch Berlin, DL 2/6342a as well as DL 2/6411, DL 2/6382, DL 2/6359, DL 2/6426, DL 2/6430, DL 2/6401a, DL 2/6422a.

⁸³ Duncan, Soviet Union and India, 70–71.

⁸⁴ Ibid., 70–71.

⁸⁵ See Srinath Raghavan, ‘Between Regional and Global Interests: The Indo-Soviet Treaty of 1971’, in Andreas Hilger and Corinna R. Unger, eds., India in the World since 1947: National and Transnational Perspectives (Frankfurt: Lang, 2012), 326-45.

⁸⁶ See ‘Spravka po voprosy o sviasakh Soveta Ekonomicheskoi Vsaimopomoshchi so stranami-nechlenami SEV v 1975 g’, 1975, RGAE, Fond 302 op. 2 d. 1521 ll. 2-7.

⁸⁷ ‘Information über die ergriffenen Maßnahmen zur Aktivierung der mehrseitigen Zusammenarbeit der RGW-Länder mit Entwicklungsländern‘, 23 January 1987, Barch Berlin, DL 2/16974.

⁸⁸ Giovanni Graziani, Gorbachev’s Economic Strategy in the Third World (New York: Praeger, 1990, 19–21.

⁸⁹ ‘Information über die ergriffenen Maßnahmen zur Aktivierung der mehrseitigen Zusammenarbeit der RGW-Länder mit Entwicklungsländern‘“, 23 January 1987, Barch Berlin, DL 2/16974.

⁹⁰ ‘Soviet Collaboration in Indian Steel Industry, 1954–84’, Economic & Political Weekly 10 (1988), 473–486.

⁹¹ ‘Approach Paper on Development of Consultancy, Design and Engineering Services in India’, 1982, NAI, List No. 249 S. No. 232 PAD/22-3 (2)/82.

⁹² Letter by M.N. Dastur to P.N. Dhar, 18 October 1974, NAI, List No. 193 S. No. 697 17/982/1974-PMS.

⁹³ Ways to encourage multilateral projects with India were already a topic of debate. See ’Informaziia o khode realizatsii ‘Programmy ekonomicheskogo, tekhnicheskogo i torgovogo sotrudnichestva na dlitel’nyi period SSSR i zainteresovannykh stran-chlenov SEV i Indii na mnogostoronnei osnove’, 16 September 1975, RGAE, Fond 561 op. 53 d. 68 ll. 59–63.

⁹⁴ Grigorii G. Kotovski, SSSR i Indiia (Moscow: Nauka, 1987), 262.

⁹⁵ ‘107th meeting of Public Investment Board to be held on 24^th May, 1979 at 4.00pm’, 16 May 1979, NAI, List No. 249 S. No. 98 PAD/22-1 (1)/79.

⁹⁶ Letters by R. Murali, advisor to the PAD, 29 March 1979 and 25 April 1979, NAI, List No. 249 S. No. 98 PAD/22-1 (1)/79.

⁹⁷ ‘Note for the Cabinet Subject: Setting up of an Integrated Steel Plant at Visakhapatnam’, 26 May 1979, NAI, List No. 249 S. No. 98 PAD/22-1 (1)/79.

⁹⁸ Ibid.

⁹⁹ ‘Planning Commission Note for the Cabinet Subject: Setting up of an Integrated Steel Plant at Visakhapatnam’, 1979, NAI, List No. 249 S. No. 98 PAD/22-1 (1)/79.

¹⁰⁰ Letter by Brahmananda Reddi to Indira Gandhi, 27 October 1970, NAI, List No. 193 S. No. 353 17/933/1970-PMS.

¹⁰¹ ‘Planning Commission Note for the Cabinet Subject: Setting up of an Integrated Steel Plant at Visakhapatnam’, 1979, NAI, List No. 249 S. No. 98 PAD/22-1 (1)/79.

¹⁰² ‘Note for the Cabinet Subject: Setting up of an Integrated Steel Plant at Visakhapatnam’, 26 May 1979, NAI, List No. 249 S. No. 98 PAD/22-1 (1)/79.

¹⁰³ Ibid.

¹⁰⁴ ‘Planning Commission Note for the Cabinet Subject: Setting up of an Integrated Steel Plant at Visakhapatnam’, 1979, NAI, List No. 249 S. No. 98 PAD/22-1 (1)/79.

¹⁰⁵ ‘Note for the Cabinet Subject: Setting up of an Integrated Steel Plant at Visakhapatnam’, 26 May 1979, NAI, List No. 249 S. No. 98 PAD/22-1 (1)/79.

¹⁰⁶ ‘Record of discussion in the 107^th meeting of the Public Investment Board held on 24th May, 1979“, 24 May 1979, NAI, List No. 249 S. No. 98 PAD/22-1 (1)/79.

¹⁰⁷ ‘Planning Commission Note for the Cabinet Subject: Setting up of an Integrated Steel Plant at Visakhapatnam;, 1979, NAI, List No. 249 S. No. 98 PAD/22-1 (1)/79.

¹⁰⁸ ‘Record of discussion in the 107^th meeting of the Public Investment Board held on 24th May, 1979’, 24 May 1979, NAI, List No. 249 S. No. 98 PAD/22-1 (1)/79.

¹⁰⁹ Ibid.

¹¹⁰ Ibid.

¹¹¹ Another line of confrontation ran between the deputy head of the Planning Commission,who was the actual chair of the Planning Commission, and the minister of steel. The deputy head of the Planning Commission wanted to inhibit the building of a steel plant at Visakhapatnam, or at least to downscale it. He lost that conflict. See letter by M. Sivagnanam, advisor to the PAD, 28 May 1979, NAI, List No. 249 S. No. 98 PAD/22-1 (1)/79.

¹¹² ‘Viability of Vizag Steel Plant’, Economic & Political Weekly 45 (1979), 1853–6.

¹¹³ The government led by Morarji Desai and the Janata Party in general resembled disparate partners united only in their hatred of Indira Gandhi and their opposition to the state of emergency. The Janata Party comprised right-wing Hindu nationalists as well as communists.

¹¹⁴ Letter by Tenneti Viswanathan to Morarji Desai, 30 April 1977, NAI, List No. 193 S. No. 929 17/933/1977-PMS.

¹¹⁵ Ibid.

¹¹⁶ Letter by Tenneti Viswanathan to Biju Patnaik, 22 June 1977, NAI, List No. 193 S. No. 929 17/933/1977-PMS.

¹¹⁷ Letter by T. Amrutha Rao to Biju Patnaik, 13 May 1977, NAI, List No. 193 S. No. 929 17/933/1977-PMS.

¹¹⁸ ‘”Visakha Ukku” stir now 50 years old’, The Hindu, 14 October 2016 [accessed on 12 September 2019 at http://www.thehindu.com/news/cities/Visakhapatnam/%E2%80%98Visakha-Ukku%E2%80%99-stir-now-50-years-old/article16071011.ece]; ’Sri T Amrutha Rao Jayanthi Celebrated in Ukkunagaram’, RINL News, 21 October 2016 [accessed on 12 September 2019 at http://www.vizagsteel.com/rinlnews/details.php?newsid=192].

¹¹⁹ ‚Bericht über den Stand der Realisierung des NSW-Anlagenexportvorhabens Mittelstahladjustage Vishakhapatnam/Indien sowie Darlegung erster Erfahrungen in der Zusammenarbeit mit den indischen Unterlieferanten‘, 18 January 1989, Barch Berlin, DL 2/14972.

¹²⁰ ‚Abrechnung des Realisierungsstandes ‚Mittelstahladjustage Vishakhapatnam/Indien‘, 17 July 1989, Barch Berlin, DL 2/14972; annex 1 to ‘Bericht über den Stand der Realisierung des NSW-Anlagenexportvorhabens Mittelstahladjustage Vishakhapatnam/Indien sowie Darlegung erster Erfahrungen in der Zusammenarbeit mit den indischen Unterlieferanten‘, 18 January 1989, Barch Berlin, DL 2/14972.

¹²¹ Protocol on the meeting of the Governmental Commission for Uniformly Steering Import and Export (RKEI) on 9 June 1989, particularly TOP 5, Barch Berlin, DL 2/14972.

¹²² ‘Bericht über den Stand der Realisierung des NSW-Anlagenexportvorhabens Mittelstahladjustage Vishakhapatnam/Indien sowie Darlegung erster Erfahrungen in der Zusammenarbeit mit den indischen Unterlieferanten‘, 18 January 1989, Barch Berlin, DL 2/14972.

¹²³ Protocol on the meeting of the Governmental Commission for Uniformly Steering Import and Export (RKEI) on 9 June 1989, particularly TOP 5, Barch Berlin, DL 2/14972.

¹²⁴ Ibid..

¹²⁵ Ibid.

¹²⁶ ‘Abrechnung des Realisierungsstandes des Objektes ‚Mittelstahladjustage Vishakhapatnam/Indien‘, 6 June 1989, Barch Berlin, DL 2/14972.

¹²⁷ ‘Reisebericht SGD Hauth AHB SKET Direktor WIT, Prof. Schmidt 30.1.-11.2.89‘, Barch Berlin, DL 2/14972.

¹²⁸ ‘Bericht über den Stand der Realisierung des NSW-Anlagenexportvorhabens Mittelstahladjustage Vishakhapatnam/Indien sowie Darlegung erster Erfahrungen in der Zusammenarbeit mit den indischen Unterlieferanten‘, 18 January 1989, Barch Berlin, DL 2/14972.

¹²⁹ Protocol on the meeting of the Governmental Commission for Uniformly Steering Import and Export (RKEI) on 20 October 1989, particularly TOP 3, Barch Berlin, DL 2/14972.

¹³⁰ Letter by Arvind Pande to the Prime Minister’s office, 28 July 1981, NAI, List No. 193 S. No. 1168 17/1856/1981-PMS.

¹³¹ Duncan, Soviet Union and India, 78.

¹³² On the severe consequences the economic collapse of the Soviet Union in 1990–91 caused in some Indian regions, such as Kerala, see Ashok V. Desai, ‘East-South Trade: Consequences of Economic Changes in the Soviet Union and Eastern Europe’, Journal of Development Planning 23 (1993).

¹³³ See Hari Vasudevan, Shadows of Substance: Indo-Russian Trade and Military Technical Cooperation since 1991 (New Delhi: Manohar, 2010).