New Delhi

Tycoon in Trouble

The Adani indictment serves as a litmus test for US-India relations.

By Muhammad Omar Iftikhar | January 2025

The recent indictment of Gautam Adani, India’s most influential businessman, by US prosecutors on charges of bribery and securities fraud has sent shockwaves through the international business and diplomatic communities. This development, eerily reminiscent of the Huawei executive’s arrest in 2018, threatens to strain the relationship between the United States and India. These two nations have increasingly found common ground in their strategic interests.

The Adani Group, a conglomerate with interests spanning energy, ports, and infrastructure, has been a cornerstone of Prime Minister Narendra Modi’s ambitious economic vision for India. Adani himself is a close confidante of Modi, and his businesses have flourished under the patronage of the Bharatiya Janata Party (BJP) government over the years. The US indictment alleges a decade-long scheme to manipulate stock prices and bribe government officials, tarnishing the image of the Adani Group and casting a shadow over Modi’s administration.

While the BJP has dismissed the allegations as a private matter and Adani’s company has denied any wrongdoing, the case can significantly impact US-India relations. The US, increasingly reliant on India as a strategic partner in the Indo-Pacific region to counter China’s growing influence, now faces a delicate balancing act. It must uphold its legal system while maintaining a crucial partnership with a nation that is pivotal to its geopolitical strategy.

The 2018 arrest of Meng Wanzhou, Huawei’s CFO, in Canada at the directives of the US Department of Justice set a precedent for how geopolitical tensions can overshadow corporate affairs. Despite facing immense pressure from China, the Trump administration ultimately allowed Meng to return to China as part of a plea deal. This decision, while arguably aimed at de-escalating tensions, raised questions about the extent to which political considerations can influence legal matters.

In the Adani case, the Modi government may leverage several factors to influence the US response. Modi has cultivated strong personal relationships with key figures in the US administration, which could affect how the US approaches this sensitive issue. Furthermore, the US’s strategic need for India as a counterweight to China in the Indo-Pacific region provides India with significant leverage. India’s growing military and economic power, combined with its geographic location, makes it a central partner for the US in its efforts to maintain a free and open Indo-Pacific.

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