Gautam Adani, one of India’s most prominent billionaires, is facing significant challenges after US federal prosecutors accused him of orchestrating a $250 million bribery scheme. Just weeks after celebrating Donald Trump’s election victory and announcing plans to invest $10 billion in US projects, Adani now confronts serious fraud allegations that could jeopardize his business empire and international ambitions.
The US charges allege that Adani and his executives paid bribes to Indian officials to secure contracts worth $2 billion over 20 years. The Adani Group has denied these allegations as “baseless,” but the impact is already evident. The group’s firms lost $34 billion in market value, and Adani Green Energy canceled a $600 million bond offering.
Adani’s business portfolio is extensive and deeply integrated into India’s economy. He operates 13 ports (30% market share), seven airports (23% of passenger traffic), and India’s second-largest cement business. He is also India’s largest private power player, with six coal-fired power plants and significant investments in green hydrogen and natural gas infrastructure. Globally, his interests span coal mines in Indonesia and Australia, and infrastructure projects in African countries like Kenya and Tanzania.
His close relationship with Prime Minister Narendra Modi has been a hallmark of his success, with critics labeling his business model as crony capitalism. This latest scandal could potentially impact the political economy of India, according to journalist Paranjoy Guha Thakurta.
This is not the first challenge Adani has faced. In 2023, US short-seller Hindenburg Research accused his conglomerate of stock manipulation and fraud, triggering a market sell-off and an ongoing investigation by India’s market regulator.
The bribery charges could significantly disrupt Adani’s expansion plans. He is already facing challenges in Kenya and Bangladesh over airport and energy deals. Experts suggest these allegations might halt his international expansion, particularly in the US.
Politically, opposition leader Rahul Gandhi has called for Adani’s arrest and promises to raise the issue in parliament. The potential political ramifications could be substantial.
Despite the serious allegations, experts believe the broader US-India business relationship is unlikely to be significantly impacted. Michael Kugelman from the Wilson Center notes that the business ties are multifaceted and robust.
Market analysts like Ambareesh Baliga remain cautiously optimistic. They believe Adani will still secure funding for major projects, albeit with potential delays. Some market sentiment suggests the issue might resolve itself, especially with a potential change in US administration.
The ultimate outcome remains uncertain. Adani’s legal team is expected to mount a robust defense, and much depends on how the allegations unfold and are addressed by both US and Indian authorities.
