India accuses Goldman Sachs of 'messing' in domestic politics

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NEW DELHI: India's government has accused global investment bank Goldman Sachs of interfering in the country's domestic politics after it raised market ratings citing “optimism over political change”.

Commerce Minister Anand Sharma said Goldman's latest report where it suggested the Hindu nationalist Bharatiya Janata Party (BJP) could topple his ruling Congress party in 2014 polls “made Goldman's credibility and motives highly suspect”.

Sharma was speaking to leading Indian business daily The Economic Times in an interview published Friday.

Governments do not normally object when investment banks raise their ratings on a country's outlook. But the Congress-led coalition, racked by corruption scandals, charges of political paralysis and a sharp slowdown in economic growth, has become increasingly worried about its chances in general elections due by next May.

Sharma accused Goldman of an “eagerness to push the case of a particular political leader” and a desire “to mess around with India's domestic politics.”Earlier in the week, Goldman in a report titled “Modi-flying our view”, hiked its rating for Indian markets to “market weight” from “underweight”.

“Equity investors tend to view BJP as business-friendly , and its prime ministerial candidate Narendra Modi as an agent of change,” the bank's analysts said.

“The opposition BJP-led alliance has gained ground in opinion polls in the last three months and current opinion polls suggest a higher probability of a BJP-led alliance forming the next government,” Goldman said.

Sharma said Indians alone would “decide the future of Indian politics” and “will not be influenced by the motivated campaign by agencies like Goldman, which have, in any case, left behind a graveyard of their failed predictions”.

The Goldman's note did not endorse the BJP but noted “optimism over political change, led by the BJP's prime ministerial candidate Mr Modi.

”Modi's pro-investor policies as chief minister of the prosperous state of Gujarat have won him endorsements from a wide range of senior Indian business figures.

But he is also seen as a politically divisive figure as the politician who was at the helm of Gujarat during deadly anti-Muslim riots in 2002.

Goldman Sachs had no immediate comment on the veteran commerce minister's accusations.

But in an interview in India's Mint daily, Timothy Moe, chief Asia Pacific regional equity strategist and one of the report's authors, said Goldman was not “expressing any preference” for any Indian party or candidate.

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