The Tatas have snapped up India’s top diplomat, raising some eyebrows

The job never ends.
The job never ends.
Image: EPA
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Subrahmanyam Jaishankar, India’s top diplomat till three months ago, has a new job.

On April 23, the $145 billion Tata group, comprising over 100 companies that produce everything from steel to software, announced that Jaishankar would take over as its president for global corporate affairs.

“In his new role he will be responsible for the Tata group’s global corporate affairs and international strategy development,” Tata Sons, the group’s holding company, said in a statement. “Dr Jaishankar will work with Tata companies to help them strengthen their business presence and positioning in their respective geographies globally.”

There is little doubt about the credentials of Jaishankar, who retired as foreign secretary in late January 2018, for the job. A career diplomat with a stellar record, the 63-year-old served as India’s ambassador to the US, China, and Singapore—all key regions for his new employer—before taking charge of the ministry of external affairs in 2015.

But there is some discomfiture over the timing of his new assignment, coming so soon after retirement. Government rules mandate that all civil servants must stay away from jobs in the private sector for at least a year after retirement—although the government can waive the requirement, as it has in Jaishankar’s instance.

“After one year nobody would have questioned (the appointment). But, if someone is in a hurry, that raises doubts. Giving him permission will raise eyebrows,” a former career bureaucrat, who served as secretary in the union government in the late 1990s, told Quartz on the condition of anonymity. “There have been cases where they (government) have refused people (private appointments).”

The cooling off period, a former foreign secretary explained, is meant to make sure that nobody gets an appointment as a quid pro quo. ”If you have been secretary in the government dealing with certain sectors, then if you immediately join a sector in which you have been dealing with, there will be an ethical issue,” said Lalit Mansingh, India’s foreign secretary from 1999 to 2001.

While the reason for the government’s generosity in this case may remain unexplained, the Tata group’s rush may stem from Jaishankar’s vast experience in countries of interest to the corporation.

East and west

Jaishankar joined the Indian Foreign Service in 1977, cutting his teeth at the Indian embassy in Moscow between 1979 and 1981. A graduate of St Stephen’s College and Jawaharlal Nehru University, both in New Delhi, he spent time in Washington DC, eastern Europe, and Japan, before taking over as India’s ambassador to the Czech Republic. A former press secretary to the president of India, Jaishankar also served as high commissioner to Singapore, and ambassador to China and the US, before leading India’s foreign ministry for three years until January 2018.

His familiarity and expertise with the corridors of power, ranging from the US and Europe to China, Japan, and southeast Asia, should be extremely valuable to a multinational corporation like the Tata group, which made more than 64% of its revenue from outside India in financial year 2017.

“His (Jaishankar) deep knowledge of the world’s two largest economies, the US and China, and extensive contacts, will prove an asset to the Tata Group,” said Sadanand Dhume, a resident fellow at the Washington DC-based think tank, American Enterprise Institute.

Among all of the group’s firms, only three—Tata Consultancy Services (TCS), Tata Motors, and Tata Steel— make for over 77% of the conglomerate’s revenue, and nearly all of its profit (pdf). And the biggest markets for these three companies are the US, China, and Europe respectively.

TCS made over half its revenue from the US, and Tata Steel got 44% of its from Europe, in financial year 2017. Meanwhile, China is the fastest-growing market for luxury car maker Jaguar Land Rover (JLR), which contributes to over 80% of the revenue for its parent Tata Motors. In all, Tata Motors made 15% of its revenue from China in the year ended March 2017.

In all three markets, the Tata firms face barriers to business, which may need the deft touch of a veteran diplomat. Jaishankar’s experience will be an asset, whether it is in navigating China’s bureaucratic labyrinth, deciphering the immigration rhetoric coming out of the Trump White House, or lobbying governments in Europe.

“Well, obviously the Tatas must have looked at the job description of somebody who can open doors for them abroad, and is familiar with different parts of the world, and also has a pretty good idea of business abroad,” Mansingh said. “I think, on all counts, Jaishankar’s record would be quite outstanding and it will be difficult to find someone to match his kind of experience.”

The precedence

This, of course, isn’t the first time that a senior civil servant has been snapped up by a private firm in India soon after retirement.

“The Tatas and Hindujas have always taken retired foreign service officers. These people think their foreign connections help,” the former career bureaucrat said. For instance, diplomat Ronen Sen was hired as a director on the board of Tata Motors in 2010 after his stint as India’s envoy to Washington between 2004 and 2009. Sen is currently serving as a non-executive independent director on the board of Tata Sons.

Some former diplomats aren’t perturbed though.

“If a fellow is going to sell national secrets, he is not going to look for a job and get permission and then do it. The advantage is that he has informed (the government),” G Parthasarathy, formerly India’s envoy to Pakistan, Myanmar, and Australia, told Quartz, adding that there may be no conflict of interest in this case. ”If you were dealing with defence, and then you join a defence company then I will look and ask,” Parthasarathy added.

Yet, there could be grey areas that’ll need to be explicitly dealt with. The Tata group’s interest in Air India, the country’s flagship carrier, for instance.

In the aviation sector, deal talks with foreign companies are often also a bilateral issue between two countries. More so when both the airline to be sold and the potential buyer are owned by the respective governments. ”This is a very pertinent point. If you have a wide job description, there will be areas where one will have to decide if there will be a potential clash of interest or an ethical issue. I think it would be fair for a retired officer to say this is an area where I want to recuse myself,” Mansingh said.

“Both the company and the appointee must chalk out the boundaries, and it is best to do it in advance so that there is no delicateness when facing a particular issue,” he added.

Tata Sons did not respond to a Quartz questionnaire on the appointment, or the potential conflict of interest.

As the former secretary put it: “The only point here is where is the need to relax the one year cooling-off period? Why the rush?”