Adani’s Controversial Footprint in India’s Neighborhood (and Elsewhere)

Few had heard of him two decades ago. Today, at 62, Gautam Adani – a college drop-out who is very close to India’s Prime Minister Narendra Modi – is one of the world’s richest people. Adani’s corporate conglomerate straddles energy, transportation, cement, defense equipment, edible oils, food distribution, and much else, in the country and across the world.

The market capitalization of the Adani Group, comprising a dozen-odd companies whose shares are listed on stock exchanges, is over $200 billion. (Market capitalization is the face value of a company’s share multiplied by its price at a given point in time.) In addition, Adani, his family members, and associates directly or indirectly control at least 1,000 entities, many of which are based out of tax havens where little or no tax is paid on company profits.

In a manner of speaking, what Elon Musk is to U.S. President Donald Trump, Adani is to Modi, but with an important difference: Adani does not hold any position in the government of India. Yet New Delhi has shaped policies, tweaked rules, bent norms, and looked the other way when investigations into Adani’s affairs have taken place – the most egregious of which is an indictment for bribery and concealment of information in the United States.

Modi has traveled the world to promote Adani’s business interests. In the process, however, the Indian prime minister has hurt his country’s relations with at least two neighboring countries, Bangladesh and Sri Lanka, as well as with other countries like Kenya – all places where Adani projects stoked local controversy and resentment.

The growth of the Adani Group has mirrored Modi’s political ascendancy – first as chief minister of the western Indian state of Gujarat for more than 12 years, starting in October 2001, and then as the country’s prime minister from May 2014 onward. Adani has accompanied Modi on many of his official trips outside India. Along the way, Adani has set up or tried to establish – in a few instances, unsuccessfully – business operations in countries such as Australia, Bangladesh, Greece, Indonesia, Israel, Kenya, Myanmar, Nepal, Sri Lanka, and Tanzania.

These projects did not always progress smoothly. In Kenya, there were public protests against a project to modernize the country’s main airport in Nairobi by the Adani Group. The airport contract was subsequently scrapped by Kenyan President William Ruto, together with another project to distribute electricity.

Adani’s image as a “national champion” took an even bigger beating in January 2023 after the U.S. firm Hindenburg Research came out with a damning 30,000 word report alleging that the Adani Group was “pulling the largest con in corporate history.” Adani Group spokespeople sought to describe the report by the New York-based “short-selling” firm as an attack on India’s sovereignty. (A short-seller speculates on trading in stocks that it does not directly own, and earns profits when prices of the stocks fall.)

In August, a second report by Hindenburg alleged that the regulator of the country’s financial markets, the Securities and Exchange Board of India (SEBI), then led by Madhuri Puri Buch, had not probed accusations of manipulation of stock prices of Adani Group companies because of conflicts of interest.

Then, in November, came the news that two agencies of the U.S. government, the Department of Justice (DoJ) and the Securities and Exchange Commission (SEC), had indicted Adani, his nephew, and their associates, charging them with bribery and corruption in the award of contracts for generating solar power as well as concealment of information from investors in the United States and in India. The grand jury indictment was based on investigations by the Federal Bureau of Investigation (FBI), which works under the DoJ.

Controversy in Sri Lanka

Even before the indictment in the U.S. was made public, the Adani Group had faced a backlash in Sri Lanka.

In September 2024, a left-oriented government headed by President Anura Kumara Dissanayake came to power in Colombo. Just weeks later, the Dissanayake administration decided to reconsider the payment arrangements for a $440 million wind and solar energy project that had been granted to the Adani Group by the previous government. A Cabinet meeting of the new government expressed doubts about whether the deal had taken place in a transparent way, and the Supreme Court of Sri Lanka was informed that a review was taking place.

Anticipating that power tariffs might be renegotiated or even that the deal might be called off by the Dissanayake government, the Adani Group first withdrew from the project on the grounds that it had become “financially unviable” and then said it might negotiate.

The controversy over the Adani deal was not new. In November 2021, a top official in Colombo testified before a parliamentary committee that Modi had exerted pressure on the then-president of Sri Lanka, Gotabaya Rajapaksa, to award the renewable energy power project in Mannar in the northern part of the country to the Adani Group. Days later, the official – the chairman of Sri Lanka’s Ceylon Electricity Board (CEB) – resigned.

This testimony came soon after Modi met Rajapaksa during a climate summit in Glasgow in the United Kingdom. Following an uproar, the CEB official retracted his statement (even as the video recording of his public testimony quickly spread on social media), and Rajapaksa also denied the claim.

Beyond the power project, Adani had proposed a project to develop an important portion of Sri Lanka’s Colombo Port, a critical shipping hub because of its strategic location. The project was seen as one that would “balance” the geopolitical interests of the two most populous countries on the planet, China and India. A Chinese firm has already set up the large Hambantota Port in Sri Lanka, with a lease period of 99 years.

The Adani project, however, met with protests from unions of port workers and opposition political parties. Public demonstrations and strikes took place. The government in Colombo canceled the project in February, thereby inflicting a blow not only to Adani but India’s geopolitical ambitions in the Indian Ocean.

All told, the controversies involving Adani Group in Sri Lanka have served to strain relations between the two countries.

Adani’s Bangladesh Debacle

Adani’s travails in Bangladesh were equally unfortunate, both for the business magnate as well as for India.

In August 2015, after Modi visited Bangladesh and met the country’s then-Prime Minister Sheikh Hasina, a most unusual agreement was signed between an entity in the Adani Group and the Bangladesh Power Development Board (BPDB). This paved the way for the establishment of a 1,600 MW coal-fired power plant in Godda in Jharkhand in eastern India that was dedicated to exporting electricity to Bangladesh.

There is no power project anywhere in the world like this one. Why? Jharkhand has the highest reserves of coal in India. But the coal used for the Godda plant travels around 9,000 kilometers by ship from the Abbot Point Port in northern Australia to the Dhamra Port in Odisha on the east coast of India. Both the coal mine in Queensland and the Abbot Point Port are controlled by entities that are part of the Adani Group. The coal is then moved 600 km by railroad to the Godda power plant. After the electricity is generated, it is transmitted over a distance of around 100 km to Bheramara in Bangladesh for further distribution.

There has been opposition from locals in Godda to the acquisition of land for the project, the compensation paid for the fertile farmland, and the way water is supplied from a major river, the Ganga (Ganges), that many Indians consider holy. Questions have also been raised about the way rules were tweaked by both the provincial government in Jharkhand and the federal government in Delhi to facilitate the establishment of the project by granting it a slew of tax benefits.

The power purchase agreement has also faced opposition across the border. Critics say that it is skewed against the interests of Bangladesh. Several news reports have claimed that Bangladesh paid over five times the country’s average electricity cost for power from the Adani plant.

On August 5, 2024, Hasina fled Dhaka amid a mass movement calling for her resignation. She took refuge in Delhi. Two days later, Nobel laureate and long-time Hasina critic Muhammad Yunus was appointed head of an interim government. Five days after that, the Indian government amended cross-border electricity export guidelines to benefit the Godda power plant and curb losses for the Adani Group.

The group then approached the Yunus-led administration, demanding $800 million in unpaid dues for electricity supplied to the BPDB from Godda. When the money was not paid promptly, the Adani Group first threatened to stop power supplies and then backtracked.

The top court of Bangladesh has set up a committee to review the deal.

Adani in Nepal

There is yet another neighbor of India in which the Adani Group is caught in a controversy.

India restricts Nepal from using high-altitude routes for aircraft, citing security concerns. The Himalayan country shares a border with China. New flight paths over Indian airspace near the border are approved with considerable caution. This has been a point of tension between Nepal and India, particularly with respect to operating new airports in Nepal, such as those in Pokhara and Bhairahawa, which were constructed with loans from China but remain economically non-viable due to India’s restrictions on the use of airspace.

Nepal’s Himal Khabar newspaper has alleged that the Modi government is exerting pressure on Kathmandu not to increase air access to Pokhara and Bhairahawa under “various pretexts” until the Adani Group is awarded contracts to operate these airports, as well as an airport at Lumbini (a Buddhist cultural center) along with the proposed airport at Nijgadh.

Indian and Nepali government officials discussed these issues in June 2023. Adani Group officials visited Kathmandu in January 2024, held talks with Nepali civil aviation authorities, and announced intentions to invest in a new airport near the India-Nepal border, besides taking over the operations of the Bhairawaha International Airport and Kathmandu’s Tribhuwan International Airport. However, these plans are yet to fructify due to a subsequent regime change: on July 15, 2024, K. P. Sharma Oli became the new prime minister of Nepal after a coalition reshuffle in the Nepali parliament.

Accusations of Coal Corruption in Indonesia

The Adani Group has been mining coal in the small island of Bunyu in the province of North Kalimantan in Indonesia since 2007. The operations have attracted several controversies.

A January 2014 report by the Organized Crime and Corruption Reporting Project (OCCRP), that was also published in the Financial Times of the United Kingdom, claimed that the invoices used for shipping coal from Bunyu to Ennore, in the southern Indian state of Tamil Nadu, were fudged to evade taxes. Paperwork for the shipments went through the British Virgin Islands and Singapore, both tax havens, with the declared price of the coal increasing more than three-fold, even as the classification of the grade of coal changed.

Evidence was adduced in the form of copies of invoices, banking records, investigations by the Directorate of Revenue Intelligence (DRI), the customs intelligence wing of the Indian government’s Ministry of Finance, leaked documents from an Indonesian coal supplier, and internal records of Tamil Nadu’s power utility.

The origins of these allegations trace back to a 2012 investigation by the DRI, two years before Modi became prime minister of India in May 2014. The DRI’s probe into 40 companies, including those that are part of the Adani Group, alleged that the prices of Indonesian coal had been artificially inflated and the higher costs had been passed on to electricity consumers.

In March 2016, the DRI issued a “look-out” circular to 50 customs offices across India, warning them about the possibility of over-invoicing by these companies. (I first reported the DRI’s findings for Economic and Political Weekly at the time).

Adani in Israel

The Adani Group was in the news again when it obtained operational control over Haifa Port, Israel’s second-largest, in January 2023. While the Adani Group has been attempting to increase its presence in West Asia to link South Asia with Europe, the Haifa contract was criticized because it coincided with escalating violence in the area.

Critics of the Modi government have argued that the deal aligned with India’s shift in foreign policy to move away from its traditional support for Palestinians and come closer to Israel and other conservative regimes in West Asia. Incidentally, in July 2017 Modi became the first prime minister of India to visit Tel Aviv in his official capacity.

Beyond Haifa Port, the Adani Group’s interests in Israel include collaborating on assembling military hardware, such as Tavor assault rifles and Hermes drones (unmanned aerial vehicles or UAVs), which have been used in the conflict in Gaza.

In September 2024, the Adani Group formed a joint venture with an Israeli company called Tower Semiconductor to set up a semiconductor chip manufacturing plant in Maharashtra with an investment of $10 billion. The chips will be used in drones, cars and smartphones.

Modi and Adani Diplomacy

Adani has often benefitted from top-level diplomacy linked to Modi’s activities abroad.

During Modi’s visit to Greece in August 2023, the first by an Indian leader in 40 years, there were discussions with Greek Prime Minister Kyriakos Mitsotakis on the Adani Group acquiring stakes in ports such as Kavala, Volos and Alexandroupoli.

Long before that, 2014, in the sidelines of the Group of 20 summit in Sydney, Australia, Modi, Adani, and the then-head of India’s biggest bank, the public-sector State Bank of India (SBI), Arundhati Bhattacharya, met and announced a memorandum of understanding to partially finance what was then described as the “world’s largest greenfield coal mining project” in the Carmichael basin in Queensland.

A proposed $1 billion loan from the SBI, however, did not come through. There were protests from environmental activists and representatives of Australian Indigenous groups. The protesters claimed the project would harm the Great Barrier Reef, worsen climate change, and reduce groundwater supplies. The Australian government eventually allowed the Adani Group to proceed with the project but on a substantially smaller scale, less than a fourth of what had originally been envisaged.

The coal from Australia could potentially be used to manufacture poly-vinyl chloride (PVC) in the Adani Group’s contentious proposed coal-to-PVC plant in Mundra, Gujarat, where it runs India’s largest special economic zone (meant for exports) and one of its largest seaports.

Gautam Adani’s proximity to Modi is epitomized in a photograph of the latter waving to a crowd before entering an aircraft owned by Adani after he won the general elections in 2014.

For years, accusations have surfaced that Adani’s business interests receive special treatment from the Indian government. In one recent example, a February 2025 report suggested that his group was favored when military rules were relaxed to grant Adani permission to set up a solar energy project near the India-Pakistan border.

Today, the Adani Group is India’s largest private operator of seaports; the largest coal miner, and importer; the largest generator of electricity from coal as well as the sun’s rays; and the largest supplier of liquified natural gas to cities. It is one of India’s largest manufacturers of cement, assemblers of military equipment, suppliers of edible oils and apples, and real estate developers. This list is not comprehensive but illustrative.

Even as the Adani Group regularly announces plans for expanding and diversifying its operations, its head, Gautam Adani, is in the eye of a storm because of his indictment in the United States.

The suit that is pending before the District Court for the Eastern District of New York in Brooklyn has resulted in considerable uncertainty for the group’s future plans. However, the Trump administration has paused enforcement of the Foreign Corrupt Practices Act, 1977, which may result in hearings on the case getting postponed.

As it stands, the Indian government’s Ministry of Law and Justice has forwarded a summons notice issued by the SEC in the United States to Gautam Adani, his nephew Sagar, and their associates to a court in Gujarat, his home state as well as that of Modi.

When the Indian prime minister – who has not addressed media conferences at home – was asked in Washington, D.C. at a joint press conference with Trump whether he had raised Adani’s case with the U.S. president, he said two heads of government do not “discuss personal matters.”