I was astonished at the March 10th news of the arrest and harassment of Indian IT professionals by Malaysian authorities, especially as the news stories talked about how they were arrested from posh highrise apartments in an upmarket location in Kuala Lumpur. Clearly those targeted were not illegal migrants who had sneaked into the country and melted into some ethnic Indian underclass. This is unprofessional behaviour on the part of the Malaysians.

On my trips to Malaysia, especially to Penang, I have been amazed that the Indians there seem to be at the bottom of the pile: the ethnic Malays have their bumiputra largesse that has allowed them to prosper; the Chinese have become the major commercial class; but the Indians, descendants of plantation workers imported in the 19^th and 20^th centuries mostly from Tamil Nadu, seem to have languished in poverty.

Indeed, this is unusual: the Indian Diaspora has generally performed well economically wherever they went, due to the cultural reverence for education and the knack for business, certainly among some traditional commercial communities including Chettiars, Jains, Gujaratis and Marwaris: see Joel Kotkin's Tribes comparing the Indian with the Jewish, the Chinese, the Ango American, the Japanese and other Diasporas.

Nevertheless, the Indians who were bullied, kicked and beaten, were not Indian-origin Malaysians, but Indian IT professionals employed in the Malayasian Multimedia Supercorridor, an attempt at cloning Silicon Valley. Interesting message the Malaysians are sending out to potential employees and investors with these moves.

Two questions arise: one, what does the Indian government intend to do about this; two, what might have been the root cause?

As for the first question, I have championed in these pages the cause of India as a hard state: a little shouting and screaming at Malaysia, threats to downgrade diplomatic relations, and dire warnings about cutting off business relationships may all be good bluster. Malaysia does not gain much by alienating India, especially with an island-grabbing China lurking nearby. A pointed exercise in international waters near the Straits of Malacca by an Indian naval battle group 'to combat piracy' may also be salutary.

But the second question is far more interesting. Why this incident, and why at this time? I have two theories. First, there is the increasing Islamist penetration of Malaysia and Indonesia, which have in the past been relatively benign Muslim societies. Indians, specifically Hindus, are an easy mark for those with Islamic jihad tendencies. Second, there is the ongoing Chinese competition with India. Once confined to strategic containment, China is now attempting to subvert Indian business competitiveness too.

Let us look at the religious angle. We have to thank none other than the Old Left, those dinosaurs of Marxism, whose continuing purple prose in the Indian English media is picked up by the international media unthinkingly. I have noticed practically an avalanche of 'analyses' in the world media recently, timed to coincide with the anniversary of Godhra and Gujarat.

There were angry reports in The Financial Times and The Wall Street Journal, among others. Not surprisingly, they all dismiss the Godhra incident with a word or two of condemnation, and then go on to beat their breasts about the ensuing riots. Civilisation is coming to an end in India because Muslims died, goes the unsaid subtext: clearly the JNU-wallahs are getting to the foreign correspondents in Delhi. Not surprisingly, again, none of them noticed either the Kashmiri Pandits dying in refugee camps in Jammu and Delhi, nor the stream of Hindus and Buddhists arriving daily in India from Bangladesh with tales of apocalyptic horror and human rights violations. Par for the course.

In the telling and retelling of Gujarat tales, the numbers get bigger. The official figures are about 800 dead, including 250 Hindus and policemen. Some publications have deduced (from reading tea leaves no doubt) that 1,000 to 2,000 died, 'mostly Muslims.' There are a Muslim Indian association and a Christian Indian association in the US, whose mailing lists they have generously put me on. Their numbers are: 5,000 Muslims killed, 10,000 raped. These numbers need to be taken with large pinches of salt.

But they are taken at face value by Islamists everywhere. This may be happening in Malaysia, too. Incensed at these allegations, religion-crazed Malays may be taking matters into their own hands, 'to teach those Hindus a lesson.' Of course the Marxists will never utter the truth, that India's Muslims are arguably the freest in the world, free from domination by mullahs and tyrants; free to hope, free to be ambitious; the only country in the world where a Muslim woman has been a member of the Supreme Court. No wonder there are no Muslim Indians in the Guantanamo Al-Qaeda camp.

A skewed picture is presented in the US, too. For example, some obscure Christian fundamentalist preacher comes to Kerala 14 times in the recent past on a visitor visa (which expressly disallows anything other than tourism), participates in vigorous abuse against Hinduism, gets mixed up with local fundamentalists and gets in the middle of a fight.

Result? US newspapers, ably aided by Old Left Indians in the US, raise alarms about the religious freedom in India! Is religious freedom the freedom to abuse another's religion and consort with absconding sex offenders? The preacher should have been jailed for immigration violations (a la what the US has been doing to its own illegal immigrants: ask the Pakistanis running away in droves to Canada), but nobody is grateful that the fellow was allowed to, instead, leave the country. I bet the next American fundamentalist will end up as a guest of the government in Tihar jail for propagating hate speech. Cooling his heels there for a year or two should cure him of some of his zeal.

The laughable US Council on Religious Freedom chooses to fulminate against India based on incidents like this, while it chooses to not see large scale fascism in Bangladesh! Mote and beam and all that good stuff. There are tangible results too, I am sure: the incidents of firebombing of a Hindu temple in Missouri recently are not unrelated to all this publicity.

It is the Jaichand/Mir Jafar syndrome all over again. Indians, either paid off in cold cash or ideologically addled, tie up with foreigners. Result: innocent Indians suffer.

However, some Old Left Indians in the US will soon get their just desserts: the erstwhile Immigration and Naturalization Service holds that no visas will be given to 'affiliated with, or members of, the Communist or totalitarian party, foreign or domestic.' There are moves afoot by Homeland Security to identify these people, amply helped by incensed Indian Americans: two can play at this game. Loss of cushy jobs, incarceration, loss of green cards, deportation, etc could not happen to more deserving people than the lovely Old Left: wherever will they go when kicked out of the US? China?

The other possibility in the Malaysian case, the Chinese card, is more diabolical. Notice that Malaysia and Indonesia, as well as Thailand, are dominated by ethnic Chinese businessmen, who often have close links back to the Communist Party of China. Note that the Chinese are now beginning a crash programme to upgrade their software and IT industry; they realise they are far behind the Indians, and so what better than to raise barriers to entry, at least in ASEAN? If Indians keep away from ASEAN markets, so much easier for Chinese to come in and take the contracts.

The attack a month or so ago on Arun Jain, CEO of Polaris, a large Indian software services firm, fits into this pattern. Jain, in Indonesia to seek arbitration in a civil dispute with a local firm, is abruptly arrested. Aren't these subtle signals suggesting, 'Indians keep off!'? After all, China considers all of Southeast Asia its territory.

China has been containing India ever since 1950, although most Indians are blithely unaware of this. A powerful report The Dragon in the Indian Ocean at analyses China's many moves to strategically contain India. Now it appears they also wish to contain India's businessmen as well.

This comes at a time when there is a renaissance in the manufacturing sector in India. Most analysts, including me, have been downbeat about India's chances in manufacturing, and we have advocated a focus on services. While this is still true, and this is where India's competitive advantage still is, it appears the obituaries about manufacturing were somewhat premature.

A Businessweek article ('India Is Living Up To Its Promise,' March 17, 2003) identifies automobile and other ancillaries as a major growth area. Bharat Forge, it says, now has 50 per cent market share in the US in its area of axle components. It identifies Tata Steel as having vastly improved its competitiveness. A Times of India article ('Wild Geese Chase: India as the Next Asian Tiger,' March 10, 2003), suggests that $70 billion has been invested in the manufacturing sector in India.

A rediff.com article ('Manufacturing will be Tomorrow's Star,' January 11, 2003) mentions TVS Motor, Moser Bauer, Bhadrachalam Paperboard, Ballarpur Industries, Bajaj Auto, Reliance and Larsen & Toubro as examples of the newly competitive Indian industry's muscle.

As a result, China is beginning to sit up and take notice. As I have never tired of pointing out, India was as big a manufacturing location as China until European colonialists ruined both. There are no inherent reasons why India cannot catch up again. The Chinese, of course, want to prevent that from happening: they want to put some spanners in the works. What better than to try what amounts to 'non tariff barriers' with easy deniability? Why not use their proxies to hurt India? This, of course, is what they have done when arming North Korea and Pakistan and allowing them to trade deadly weapons technologies: plausible deniability.

However, in either case, whether it is the result of Marxist-fascist propaganda, or a deliberate Chinese ploy, India needs to come down like a ton of bricks on Malaysia. India has little to lose and a lot to gain. This whole thing is a fall out from the perception of India as a gentle giant, a Gulliver tied down by Lilliputians, poked and prodded by them; India needs to assert its military, industrial and commercial might to put any illusions to rest.

India is, after all, at purchasing power parity, the fourth largest economy in the world. Malaysia should be looking for a partnership with India, not being a proxy in China's nasty little business wargames. After all, the giant sucking sound Malaysians are hearing is the sound of their manufacturing jobs, and their prosperity, disappearing into the maw of the Chinese beast. India and Malaysia are far more complementary economies.