The new Adani saga has not only shaken his own business conglomerate, but also sent shockwaves across the whole country and its bilateral relations with the United States. Many experts believe that the bribery allegations against Asia’s second richest man, Gautam Adani, will leave a significant impact on US-India ties unless the president-elect Donald Trump decides to halt the prosecution.
The US prosecutors charged Adani with fraud in a $250 million bribery scheme related to solar power contracts. Adani had committed to invest $10 billion in the US energy and infrastructure when Trump won the 2024 US elections.
However, a week later, the US court alleged that the Adani Group orchestrated a scheme to pay various Indian government officials to lie to investors and banks to raise billions of dollars and obstruct justice.
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It's worth mentioning that the Republican leader reiterated he maintained a 'great' relationship with India during election campaigns in October 2024. While Trump praised PM Modi as a great leader, he also expressed dissatisfaction with charges India levies on foreign products and vowed to introduce a reciprocal tax if elected as the next president.
The Fate of India-US Relation
Talking to Bloomberg, Brahma Chellaney, a professor of strategic studies at the Center for Policy Research, said that the indictment is seen as politically driven in New Delhi. He also predicted that it will have a bearing on US-India collaboration and mutual trust unless the incoming Trump administration drops the prosecution.
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“Much will depend on how the next US administration seeks to chart the relationship with India,” Chellaney noted.
Experts also predicted that everything depends on how the Trump's new administration handles the development. Trump himself on multiple occasions claimed that he has been a victim of vindictive politics and persecuted many times as well.
On the other hand, many of the key people Trump nominated to be a part of his cabinet seem to be pro-India. Last year, Trump's new national security adviser Mike Waltz was Modi's guest at India’s Republic Day celebrations. In July, Trump’s pick for secretary of state Marco Rubio, introduced a bill to the US Senate to boost defense ties with India and treat the South Asian nation as a NATO ally like Japan.
“I have no doubt that feelers have already been sent out to the Trump team. 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?” said Milan Vaishnav, director and senior fellow of the South Asia Program at the Carnegie Endowment for International Peace as quoted by Bloomberg.
It is still not clear what stance Modi will take on the matter. Just before the beginning of the winter session of the parliament on November 25, Modi said that there should be “healthy debate” and also accused some members of trying to control the parliament for their own political gains.
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The US government last year announced to provide $553 million in financing to one of his business units for a port terminal in Sri Lanka’s capital. It was the largest infrastructure investment in Asia by the US International Development Finance Corp. However, the development of the project is now unsure.
The US is India’s top trading partner with its bilateral trade surpassing $72 billion in the January-July 2024 period. A recent Global Trade Research Initiative (GTRI), indicated the need for India to diversify its portfolio in exports beyond the US. India has made a lot of efforts to get closer to the US and a misstep while handling the Adani case may push India far away.
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