Economic nationalism under strain as Indian corporates turn to America

By Sandeep Pandey* 

U.S. federal prosecutors withdrew a criminal case involving allegations that Gautam Adani had bribed officials in India to secure solar energy projects, stating that they lacked sufficient evidence. Gautam Adani and his nephew Sagar Adani also settled a civil fraud case with the Securities and Exchange Commission by paying a fine of around ₹180 crore without admitting wrongdoing. In addition, Adani Enterprises reportedly deposited around ₹2,750 crore into the U.S. Treasury to resolve allegations that it had violated U.S. sanctions on Iran through purchases of Iranian liquefied petroleum gas (LPG). 

It is evident that Adani paid a heavy price to secure relief in the United States. His close associate Narendra Modi, who at one stage appeared eager to cultivate Donald Trump through slogans favorable to the Trump administration, could do little to shield him. Meanwhile, the U.S. continues to impose its conditions on India, often in ways seen as humiliating for the country.

Adani not only paid penalties but also announced plans to invest around ₹1,00,000 crore in the American economy, claiming it would generate employment for 15,000 people there. His lawyer, who also serves as Donald Trump’s personal attorney, argued in court that ongoing proceedings against Adani could hinder his ability to invest in the U.S. economy. The lawyer informed the court that Adani was prepared to invest roughly ₹1,00,000 crore in American infrastructure projects.

In effect, Adani appeared to secure relief through financial settlements. The question remains: if no wrongdoing had occurred, why were such large payments made? Critics may argue that the matter was resolved through financial negotiation rather than legal vindication. Narendra Modi himself has often remarked that, as a Gujarati, he understands the strategies and calculations of business very well.

Modi may have helped protect his associate, but critics argue that the country’s interests suffered in the process. In 2019, under U.S. pressure, India halted oil imports from Iran. This year as well, India reduced oil purchases from Russia amid mounting American pressure. However, it is becoming increasingly clear that the advantages of discounted Russian oil benefited large corporations more than ordinary Indians. Mukesh Ambani’s Reliance Industries, for instance, processed significant quantities at its Jamnagar refinery before exporting refined products to European markets. The U.S. wants India to depend primarily on American oil supplies. During tensions around Iran and disruptions in the Strait of Hormuz, Washington temporarily permitted India to continue purchasing Russian oil before extending the arrangement. At the same time, the U.S. has imposed steep tariffs on Indian products and reportedly encouraged Bangladesh to purchase American cotton instead of Indian cotton for its garment exports. In several ways, critics argue, American policies have undermined Indian economic interests.

During the Iran conflict, Donald Trump announced that Mukesh Ambani’s Reliance Industries would establish an oil refinery in Texas with a refining capacity of 1,68,000 barrels of crude oil per day. Under a 20-year agreement, the refinery would prioritize American crude, process it, and market the products. Estimates suggest that Reliance could invest around ₹30,00,000 crore in the project. Construction is expected to generate employment for around 2,000 people, with approximately 300 permanent operational jobs afterward.

When Narendra Modi assumed leadership of India’s economy, he strongly promoted the slogan “Make in India,” presenting it as a strategy to attract global investment into the country. Many Indians believed that his extensive foreign visits were aimed at bringing industries and employment opportunities to India. Yet today, two of the corporate groups considered closest to him are instead investing heavily in the American economy—or, as critics allege, are being compelled by the U.S. to do so.

Has unemployment in India declined to such an extent that Indian industrialists can now prioritize creating jobs in America? Many still remember how Gujaratis and Punjabis who entered the U.S. illegally in search of work were handcuffed and deported on aircraft typically used for cargo transport. India’s response was muted. Instead, authorities detained several alleged Bangladeshi migrants in Delhi and deported them to Bangladesh. It later emerged that one of those deported was a pregnant Indian woman, who had to be brought back following a court order. Even then, India remained largely silent toward the U.S.

Following the terrorist attack in Pahalgam, India dispatched seven diplomatic delegations abroad in an effort to convince the international community that Pakistan sponsors terrorism. Yet Pakistan was later appointed vice-chair of the United Nations Security Council’s Anti-Terrorism Committee and also given charge of the Taliban Sanctions Committee. The U.S. President invited Pakistan’s Army Chief, Field Marshal Asim Munir, to the White House. Even now, in efforts to negotiate a ceasefire involving Iran, Washington appears willing to rely on Pakistan’s assistance. Critics therefore argue that the U.S. has effectively neutralized India’s diplomatic campaign against Pakistan, while the Indian government has responded with silence. This has led many to ask why India’s Prime Minister appears so constrained in dealing with Washington.

For critics, Narendra Modi’s political character now stands exposed. They argue that he projects toughness toward Pakistan but becomes cautious before major global powers such as the U.S. and China. In their view, his government has reduced India’s strategic independence in its dealings with Washington. They further contend that this reflects a broader weakness within Hindutva nationalism: it appears assertive under favorable conditions but retreats when confronted with stronger powers or difficult circumstances.

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*Secretary General of the Socialist Party (India)