Indian Reform Stumbles on Corruption Crisis

The administration of Indian Prime Minister Narendra Modi finds itself in the middle of another major political crisis. Several reports surfaced in mid-February revealing details about investigations into possible corporate espionage. Suspects have been charged with stealing documents and bribing officials to obtain information, a marked escalation in illegal clandestine tactics that have been an inherent part of Indian business culture for decades.

Unlike previous wrongdoing, however, the latest scandal involves the central government. In recent days, a number of high-profile Indian energy firms — several with links to the prime minister and his ruling Bharatiya Janata Party — have been implicated. As a result, the executives of some of India's largest companies have been arrested. The scandal comes at a time when the central government is facing backlash over the unpopular executive order to reform the country's convoluted land acquisition policies. The espionage charges further damage the political will for land reform ahead of a contentious month of wrangling to pass a national budget that will increase investment in India's aging rail networks. These major obstacles serve as another reminder of the significant domestic impediments to reforming the Indian economy.