Adani charges to test Trump’s desire to keep India in US orbit

By Sudhi Ranjan Sen

In 2018, the arrest of an executive with Chinese tech giant Huawei Technologies Co for breaching US laws shocked President Xi Jinping’s inner circle and raised questions over whether Donald Trump would intervene in the case.

Trump now faces a similar dilemma after US prosecutors charged Gautam Adani — India’s most powerful businessman and a close ally of Prime Minister Narendra Modi — in a $250 million bribery scheme. While Modi’s party called it a private matter, and Adani’s company denied the allegations, the case threatens to roil US-India diplomatic ties.

Although Trump didn’t intervene in the Huawei case, which was eventually settled in 2021 after he left office, on its face he’ll have more incentive to make this case go away. Beyond Trump’s personal connection with Modi, the incoming US president has packed his team with China hawks who want to see stronger ties with India to counterbalance Beijing’s power in the region.

Yet even if Trump does a favor for Adani, who praised the president-elect’s “unbreakable tenacity” after his election win, the case is yet another reminder of the long reach of US law — one that can affect both friends and foes around the world. A proliferation of American sanctions targeting Russia, China and even India, although it’s mostly gotten waivers, has accelerated the expansion of the BRICS grouping as nations seek an alternative to the US dominance of the financial system.

"If there is one person on Earth who stands as the embodiment of unbreakable tenacity, unshakeable grit, relentless determination and the courage to stay true to his beliefs, it is Donald Trump. Fascinating to see America’s democracy empower its people and uphold the nation's…" said Gautam Adani on X, on November 6, 2024.

For India in particular, the charges against Adani only reinforces its strategy to keep a foot in both major camps, staying friendly with the US while also keeping up good ties with Russia, China and other major economies in what’s known as the Global South. India remains reliant on Russian weapons and energy, and soon plans to host Vladimir Putin for the first time since the war began.

“The indictment of Adani is seen in New Delhi as politically driven and will have a bearing on US-India collaboration and mutual trust unless the incoming Trump administration drops the prosecution,” said Brahma Chellaney, a professor of strategic studies at the Center for Policy Research in New Delhi. “Much will be depend on how the next US administration seeks to chart the relationship with India.”

India’s Ministry of External Affairs declined to comment when contacted for further information. Trump’s team didn’t respond to requests for further information.

For the moment, it remains unclear if Modi will look to distance himself from Adani. He’s facing a more vocal opposition, who have more than doubled their support in the parliament after elections earlier this year, and are now pushing for federal investigators to probe Adani. Modi’s party suffered a setback in the polls that forced him to govern with coalition partners for the first time.

Even so, if India has a national champion, it’s the Adani Group. Modi and the billionaire share deep links going back decades in their home state of Gujarat, and Adani was instrumental in helping revive the prime minister’s reputation when he came under attack over religious riots in 2002.

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After the arrest of Meng Wanzhou, the daughter of Huawei’s founder, the Communist Party eventually portrayed it as an attack on China and celebrated her return, even saying Xi personally gave instructions on the case.

Modi may take a different approach, possibly using his personal ties with Trump and the US’s strategic need for India’s support in the region as leverage. And while Trump shares a mutual admiration with Modi, he’s long called out India for taking advantage of the US on trade.

“I have no doubt that feelers have already been sent out to the Trump team,” said Milan Vaishnav, director and senior fellow of the South Asia Program at the Carnegie Endowment for International Peace. “Certainly, the Trump administration could decide not to pursue them or to settle them quickly and with little fanfare. The question, of course, is what will the famously transactional Trump want in return?”

Trump’s Team

Much will depend on who will run the Department of Justice. Trump personally has been prosecuted in a number of cases he says are politically motivated. His initial nomination of Matt Gaetz as attorney general and his subsequent pick of longtime ally Pam Bondi suggests there will be fewer guardrails on intervening in politically sensitive cases.

Trump has already nominated several key people to his team who are pro-India supporters. Marco Rubio, Trump’s pick for secretary of state, introduced a bill to the US Senate in July to boost defense ties with India and treat the South Asian nation as a NATO ally like Japan. Mike Waltz, who Trump has chosen as his national security adviser, was a guest of Modi at India’s Republic Day celebrations last year.

The US government will have its own balancing act to manage. It gave Adani an endorsement last year when the US International Development Finance Corp. announced it would provide $553 million in financing to one of his business units for a port terminal in Sri Lanka’s capital, marking the government agency’s largest infrastructure investment in Asia. It’s unclear whether that project will still go forward.

For India, which has leaned closer to the US in recent years, the Adani case only underscores the risks of jumping too far into the American camp. Tensions had already been high after US prosecutors accused an Indian government employee of directing a foiled plot to assassinate a Sikh separatist with US citizenship in New York.

India’s top diplomat, External Affairs Minister Subrahmanyam Jaishankar, once described the nation’s foreign policy in terms of “hedging.” That approach has allowed it to maintain friendly ties with the US and its allies while also remaining on good terms with Putin, who is a key supplier of oil and weapons.

“India might be more cautious in diversifying its economic and strategic interests but the Modi government recognizes that the US is the most powerful country in the world and India can’t take it head on,” said Sushant Singh, a lecturer of South Asian studies at Yale University.