As political developments over the past year seem to have weakened the hold on power of India’s Prime Minister Narendra Modi, the Adani Group has been reaching out to leaders of political parties opposed to Modi’s ruling BJP party. Is Group head Gautam Adani of the view that his proximity to Modi may work against his business interests in the future?
The close relations between Gautam Adani and India’s Prime Minister Narendra Modi are well known. Over the past year, however, Adani has sought to reach out to key political opponents of the Prime Minister’s BJP party in an apparent effort to develop working relationships with politicians across India’s political spectrum.
Modi’s political stocks have suffered over the past year. His party copped a humiliating defeat in a significant election in the state of West Bengal in May 2021. The Prime Minister also abrogated three controversial laws relating to agriculture following a year-long protest by farmers. The protests were about, among various issues, corporatisation of farming that would have benefitted groups such as Adani’s. Gautam Adani’s effigy was burnt by protesters who had camped outside the national capital Delhi, and he was publicly named as Modi’s crony.
At the same time, the past year has been one of unprecedented growth for the Adani Group, and for Gautam Adani’s personal fortune which expanded by more than US $50 billion in 2021. At one stage, he had become India’s – and Asia’s – richest man on the basis of market capitalisation of the shares of Group companies, overtaking Mukesh Ambani who heads Reliance Industries Limited and who has also been criticised by the agitating farmers.
The Adani Group’s phenomenal rise coincided with Modi becoming Chief Minister of the western Indian state of Gujarat in 2001 and the country’s most powerful leader 12 years later. When Modi travelled from Ahmedabad, the largest city in Gujarat, to New Delhi in May 2014 after emerging victorious in the general elections, he flew in a private plane owned by Adani. Modi had used the Group’s aircraft for months to campaign across the length and breadth of the country.
Subsequently, the Modi government was accused by its critics of tweaking policies that helped Adani expand its operations in several infrastructure sectors of the economy, including power generation, power transmission, ports and airports. Leader of the opposition Congress party Rahul Gandhi coined a slogan 'Hum do, humare do' (loosely translated to mean ‘We two, we have two’) that twisted an old advertising slogan favouring small families to refer to Modi and his trusted lieutenant Home Minister Amit Shah on the one hand, and Mukesh Ambani and Gautam Adani on the other. (All four are from Gujarat.)
Internal documents prepared more than two years ago by a public-relations firm engaged by Adani that have been perused by this correspondent suggest that he should not be perceived as being excessively close to Prime Minister Modi. Most corporate captains in India portray an image of themselves as being politically neutral.
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Adani has long known Kamal Nath, a prominent politician from the Opposition Congress party, who was a minister in the Union government and the Chief Minister of the central Indian state of Madhya Pradesh. He has been elected to Parliament from the Chhindwara constituency in the state no fewer than nine times. Nath is currently leader of the opposition in Madhya Pradesh and his son is the MP from Chhindwara, where the Adani Group is trying to set up its Pench coal-based power plant. The project, and Nath’s role in promoting it, have been embroiled in controversies over land acquisition that have been reported by AdaniWatch. (More on the unfolding Pench controversy will be published by AdaniWatch in the coming weeks.)
Gautam Adani’s outreach to Modi’s political opponents is significant not just for its political symbolism. There may also be a strong business case for it. The largest company in the Adani Group – Adani Ports and Special Economic Zones (‘Adani Ports’), that runs twelve ports and terminals across India’s coastline (the corporation’s ‘string of pearls’) – requires support from the governments of India’s coastal states. At present six of these states are ruled by parties other than the BJP. These are Maharashtra, Kerala, Tamil Nadu, Andhra Pradesh, Odisha and West Bengal.
This fact shines a light on why Adani may be interested in building relationships with political parties and leaders in these coastal states. Not surprisingly, it is in two of these states that media storms have arisen following meetings between the state’s elected Chief Ministers and key Adani Group officials, including Gautam Adani himself, after lucrative contracts were handed by these states to companies in the Adani Group.
Andhra Pradesh is a southern state of India. The term ‘Adani Pradesh’ came into frequent circulation among politicians there due to a growing perception that the state’s ruling party, the Yuvajana Shramika Rythu Congress Party (YSRCP), and its chief minister YS Jagan Mohan Reddy are favouring the Adani Group in government contracts.
Since September last year, the term has been used by leaders of three parties in the state. On 23 September 2021, K Rama Krishna, the Secretary of the Andhra Pradesh state unit of the Communist Party of India, accused the YSRCP government of turning the state of Andhra Pradesh into ‘Adani Pradesh.’ He was quoted by the United News of India wire service, as having ‘demanded the Y S Jagan Mohan Reddy headed government ... disclose the secret deal between the Chief Minister and industrialist Gautam Adani.’
The term was used again by a leader of India’s largest leftist party – the Communist Party of India (Marxist) – at a meeting in the state on 13 November 2021. The CPI (M)’s state executive committee member MVS Sarma was quoted saying: ‘The BJP is not a people’s party and it is a political party working for the corporates and Prime Minister Narendra Modi has virtually become a representative of the corporate sector and has also converted Andhra Pradesh into Adani Pradesh.’
The most prominent politician to use the term in the state is Payyavula Keshav, a member of the Telugu Desam Party that was ruling the state until 2019 when the YSRCP won power, and who is the Chairman of the Andhra Pradesh Legislative Assembly’s Public Accounts Committee. In a statement to the media on 7 November 2021, he slammed the YSRCP government for transforming Andhra Pradesh into Adani Pradesh by ‘blindly following the business model of the Gujarat industrialist, which would adversely impact the interests of the people in the State.’
These comments have followed reports across a section of the state’s media that Gautam Adani and his brothers had a ‘secret meeting’ with Chief Minister Reddy in early-September.
Whether or not such a meeting took place, there has been a clear sequence of business opportunities that the Adani Group has exploited in the state since the YSRCP government came to power. These include the acquisition of the Krishnapatnam Port in April 2021, and the acquisition of the Gangavaram Port in September 2021. In addition, in February 2021, a company owned by Adani Green Energy Limited won contracts to develop five solar power projects in the state with a generation capacity of 3000 megawatts.
Gateway to West Bengal
Unlike the alleged ‘secret meeting' with the Chief Minister of Andhra Pradesh, Gautam Adani himself publicised a meeting he had with West Bengal Chief Minister Mamata Banerjee on 2 December 2021. He tweeted that he was ‘delighted to meet @MamataOfficial Hon’ble Chief Minister Mamata Banerjee’ and that they ‘discussed different investment scenarios and the tremendous potential of West Bengal.’ He added that he ‘look[s] forward to attending the Bengal Global Business Summit in April 2022.’
The fact that Adani himself publicised the meeting is significant as Banerjee of the All India Trinamool Congress party (TMC) is one of Modi’s fiercest critics and is a rival who is seen as trying to pitch herself as a potential candidate for Prime Minister in India’s next general elections that are scheduled for 2024. After a none-too-impressive performance in the Parliamentary elections in 2019, Banerjee’s party delivered a crushing defeat to the BJP in state elections in 2021. Modi and Shah had personally led the election campaign in the state that the BJP had gone all out to try and win. Instead, Banerjee was elected for a third consecutive term as Chief Minister of West Bengal, a position that she has held since 2011.
Notably, the TMC Member of Parliament Mahua Moitra has been an outspoken critic of the Adani Group. In December 2019, Moitra described a contract between the Indian Oil Corporation and GAIL (formerly Gas Authority of India Limited), two government-owned companies, and the Adani Group’s Liquified Natural Gas terminal at Odisha’s Dhamra port, a ‘fraud’ and alleged that the contract had been signed without any tender process being followed.
In the second half of 2021, Moitra has repeatedly called for investigations by Indian authorities into foreign portfolio investors (FPIs) based in Mauritius and other tax havens that are heavily invested in the Adani Group. A letter sent by Moitra to the head of the country’s financial markets regulator, the Securities and Exchange Board of India (SEBI) in December 2021 referred to AdaniWatch’s investigation into these FPIs. Gautam Adani’s meeting with her leader, Banerjee, led Moitra to clarify that she ‘stands by’ her consistently critical comments about the Adani Group.
As in Andhra Pradesh, there is more than just politics to the meeting. There is also a business case. West Bengal is one of only two coastal states in India in which Adani Ports does not have a presence. In October 2021, Adani Ports successfully bid for a contract to operate a berth at the Haldia dock complex in the state. Reports have also stated that Adani Ports is also likely to bid to develop Tajpur port, a greenfield port that the state government intends to develop as a Public-Private-Partnership, with the company having participated in a pre-bid meeting in November 2021. Adani Ports has reportedly bid to operate six berths at the Kidderpore dock at the Kolkata Port that is earmarked for privatisation.
The Adani Group is also exploring possibilities of developing a new port at Kulpi in the state. It is also looking at operating coal mines and setting up a plant to make ethanol from rice husks. These project proposals are yet to come to fruition.
Shift in the Political Wind?
2021 was a year of several political setbacks for the BJP. It suffered a heavy defeat in the West Bengal state election in May after having deployed enormous resources into its campaign. Banerjee’s victory has propelled her ambitions to take on Modi at a national level.
In 2021, the BJP government faced considerable criticism for its failure to contain the second wave of the Covid-19 pandemic that rocked the entire country through the months of March, April, May and June, resulting in what has been described as ‘India’s worst tragedy since (the) Partition’ of the subcontinent in 1947.
In November 2021, Modi said he would repeal three contentious agricultural laws that his government had passed in 2020, following a year of stiff resistance by farmers’ organisations, including continuous protests on the outskirts of Delhi. Even a state governor appointed by his regime stridently criticised his decision not to concede that the laws were against the interests of farmers, hundreds of whom died during the agitation.
These setbacks have removed the sheen of invincibility that had cloaked Modi and the BJP since their momentous victory in the 2019 general elections for a second five-year term. The BJP won a majority of seats in the Lok Sabha or the lower house of India’s Parliament – the first party to do so since the Congress in 1984.
Does the apparent bonhomie of Gautam Adani with the Prime Minister’s political opponents signal a shift in the political wind? The next general elections in India will take place in 2024.
The writer is an independent journalist.