The Bush administration is facing fierce criticism across India for backing the Coca Cola and Pepsi Cola companies in their fight with local authorities and consumer groups.
Last week, the two multibillion-dollar soft drink giants were forced to wind up their operations in the state of Kerala over charges of selling substandard products that could pose health risks.
The cola companies are already facing full or partial bans in six other Indian states as a result of a growing nationwide campaign by environmental groups and local communities.
Researchers at the Center for Science and Environment, an independent group, say they have conducted various studies that clearly show pesticide residues in Coca Cola and Pepsi products in India were 24 times higher than European Union standards.
Both companies have categorically denied this charge, amid assertions that their products are safe and pose no risk to human health.
However, they have mostly failed to convince local health officials in many parts of the country. The cola companies have been ordered by the Indian Supreme Court to reveal the contents of their products within the next six months.
Those campaigning against the cola operations in India say they are furious over the U.S. government's refusal to consider local environmental concerns and its seemingly unconditional support for the two companies.
"The U.S. government should let the Indian government decide what is safe for the Indian public," said R. Ajayan of the Plachimada Solidarity Committee in Kerala, in response to a senior U.S. trade official's criticism of India's action against the companies.
"This is a setback for the Indian economy," Franklin Lavin, the U.S. undersecretary for international trade, told Agency France Press in an interview following the Kerala ban on Coca Cola and Pepsi products.
"In a time when India is working hard to attract and retain foreign investment," Lavin said, "it would unfortunate if the discussions were dominated by those who did not want to treat foreign companies fairly."
Lavin, a former U.S. ambassador to Singapore, who has also held senior management positions at Citibank, is due to lead a business delegation to India in November to explore new investment opportunities.
Activists charge that the cola companies are trying to use political influence in India to avert the ban on the sale of their products and that Lavin's comments demonstrate the Bush administration's efforts to favor those who financed its election campaigns in the past.
In 2004, the George W. Bush presidential campaign received more than $380,000 from Coca Cola and its affiliates, according to the India Resource Center, an international campaign group that works closely with local activists.
"Coca Cola has strategically bought its way onto the good side of the Bush administration," said the Center's Amit Srivastava, "which is now returning the favor for the financial support."
Lavin has accused India of treating U.S. companies "unfairly," but activists like Srivastava think that is not true.
"It is ridiculous," he says, "It's the other way round."
Srivastava and others say this is not the first time U.S. officials are intervening on behalf of Coca Cola and that their actions in the past leave no doubt that they are willing to discount human rights when commercial interests are at stake.
In 2002, for example, when Coca Cola sought a waiver of the company's mandatory public listing in India, a condition that had been placed on its entry into the country, some senior U.S. officials left no stone unturned to seek a favorable action from Indian officials.
"I understand this is the second time that Coca Cola's waiver request has been denied," said William Lash, then assistant secretary of the U.S. Department of Commerce, in a letter to the Indian authorities.
"I find it to be very unfortunate," he added, "not just for the company, but also for India's investment climate."
The Indian government ultimately approved the waiver request.
Activists say the U.S. perception of "investment climate" as represented by both Lash and Lavin is not shared by most Indians who care foremost about local communities and the environment.
"American companies cannot get away with exploitation of natural resources or subversion of the standardization process in the name of foreign investment," says Nandlal Master of Lok Samiti, a community organization in India's most populous state of Uttar Pradesh.
In the area of Mehdigang in Uttar Pradesh, local activists like Master who have challenged Coca Cola say they are facing severe water shortages and pollution as a result of the company's bottling operations.
Sawai Singh, who works with a local community group that has challenged the Coca Cola operations in Kala Dera in the state of Rajasthan, seems no less resentful of foreign companies' presence.
"Maybe it is time for the U.S. to reduce its investment," he says. "The U.S. companies have gobbled up many Indian-owned companies. They have destroyed livelihoods for a large number of Indians."
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