New Delhi:
India is poised to become an economic powerhouse of the 21st century, offering an alternative to China for investors looking for growth and de-risking its supply chain, with Prime Minister Narendra Modi and industrialists Gautam Adani and Mukesh Ambani will play a fundamental role in shaping the economic superpower. country will become in the coming decades, according to a CNN report.
The report says that to boost growth, the Modi government has embarked on a massive infrastructure transformation by spending billions on building roads, ports, airports and railways.
It also greatly promotes digital connectivity, which can improve both commerce and daily life.
“Both Mr Adani and Mr Ambani have become important allies as the country embarks on this revolution,” the report said.
Worth $3.7 trillion in 2023, India is the fifth largest economy in the world. The country rose four places in the rankings during Prime Minister Modi's decade in power, leaving the United Kingdom behind.
The country is comfortably positioned to grow at least 6 percent annually in the coming years, but analysts say the country needs to target growth of 8 percent or more if it wants to become an economic superpower. “It will push India higher in the rankings of the world's largest economies, with some observers predicting the South Asian country will become number three by 2027, behind only the US and China,” CNN's analysis said.
The Adani Group and Reliance Industries – the two sprawling conglomerates with valuations of more than $200 billion each – have built companies in sectors ranging from fossil fuels and clean energy to media and technology.
“Investors are applauding the duo's ability to deftly target sectors that Prime Minister Narendra Modi has prioritized for development. a real alternative to China for investors looking for growth and manufacturers looking to reduce risks in their supply chains,” the report said.
“As a result, these three men – Prime Minister Modi, Mr Ambani and Mr Adani – are playing a fundamental role in shaping the economic superpower that India will become in the coming decades,” it added.
The report also pointed out that the kind of power and influence enjoyed by the two Indian tycoons has been seen before in other countries that are “undergoing periods of rapid industrialization.”
It says that both Mr. Adani and Mr. Ambani are often compared by journalists to John D. Rockefeller, who became America's first billionaire during the Gilded Age, a 30-year period in the closing decades of the 19th century.
“India is in the middle of something that America and many other countries have already experienced. Britain in the 1820s, South Korea in the 1960s and 1970s, and you could say China in the 2000s,” says James Crabtree, the author of The Billionaire Raj, a book about the wealthy from India.
Considered the financial capital of India, Mumbai bears the imprint of the two tycoons everywhere, from high-rise apartment buildings branded with Adani Realty to cultural institutions named after the Ambani clan, and even the international airport, which is managed by Adani.
“Some spaces don't need names or eye-catching labels, but their relationships are just as clear. Everyone in Mumbai knows who lives in Antilia – Ambani and his family's personal skyscraper, which reportedly cost $2 billion to build and features a spa, three helipads and a 27-storey theatre, located on a street called 'Billionaires' Row', with outstanding geometric architecture that rises above the neighborhood.'
The CNN report also mentions the grand pre-wedding celebration of Mukesh Ambani's son Anant Ambani in March this year, when billionaires and film stars from across the world flew to Jamnagar.
Mark Zuckerberg, Bill Gates and Ivanka Trump were among the many A-list celebrities in attendance. The three-day celebration, featuring performances by pop star Rihanna and magician David Blaine, has captivated India and underlined Mr Ambani's growing global influence.
Guido Cozzi, professor of macroeconomics at the University of St. Gallen in Switzerland, said that these “conglomerates are very, very important and very well connected,” noting that both the Adani Group and Reliance Industries had been operating for years before Prime Minister Modi came to power were established.
“They are not typical stagnant monopolistic conglomerates. They are quite dynamic,” said Cozzi.
Not only do they play “an important role” in building infrastructure, which “directly promotes growth,” but the two business groups also help the country expand “indirectly” by boosting connectivity through digital innovation, he explained out.
Reliance was founded in 1957 by Mr Ambani's father Dhirubhai as a small yarn trading company in Mumbai. In the decades that followed, it grew into a colossal conglomerate spanning energy, petrochemicals and telecommunications.
In less than a decade, Mukesh Ambani has not only revolutionized India's telecom sector, but has also become a top player in industries ranging from media to retail.
The report says Mukesh Ambani's ambition and breathtaking pace of expansion are matched by Mr Adani, “…who now heads businesses ranging from ports and energy to defense and aerospace”.
The 62-year-old first-generation entrepreneur started his career in diamond trading before setting up a commodities trading company in 1988, which later evolved into Adani Enterprises Limited (AEL).
According to a January note from US brokerage firm Cantor Fitzgerald, AEL is “at the heart of everything India wants to achieve.”
The company serves as an incubator for Mr Adani's businesses. Many have spun off to become leading players in their respective industries. According to Cantor, the company's current focus on airports, roads and energy makes it “a unique long-term investment opportunity.”
The report notes that while both barons have built much of their fortunes on fossil fuels, they are now investing billions in clean energy. Notably, their green energy pivot comes at a time when India has set itself some ambitious climate goals.
The report also notes that despite India's growth success, rising youth unemployment and inequality remain persistent problems. According to the World Bank, the country ranked a modest 147 in terms of gross domestic product (GDP) per person in 2022, a measure of living standards.
Opposition parties in India have targeted the BJP-led government over claims of links to the country's super-rich and Mr Adani's meteoric rise.
According to the report, Prime Minister Modi's “alleged relationship with the billionaires” is once again being questioned by rivals during the Lok Sabha polls.
Some processes, notably greater transparency in the allocation of India's natural resources and the overhaul of the country's bankruptcy laws, have undergone important reforms under Prime Minister Modi, he added.
According to the report, some experts say that “a degree of connection” between politicians and the business elite “could help the nation grow faster.”
The report also suggests that India should encourage entrepreneurship and innovation to bring more companies into the sector because a country, where millions of people are joining the workforce every month, cannot be absorbed by a few conglomerates.
“They are phenomenal entrepreneurs, who have managed to sustain steady growth and development in India's vibrant but sometimes chaotic political and business environment,” said Rohit Lamba, an economist at Pennsylvania State University who is also the co-author of Breaking the Mould, a 2023 book that explores how the Indian economy can grow.
“India cannot become rich before it becomes old thanks to the support of a few big companies like Adani or Ambani… India should create more companies,” he added.
The report says India also has other conglomerates. The 156-year-old Tata Group wields enormous power over several key sectors ranging from steel to aviation, but often does not invite the same scrutiny as newer conglomerates, especially because it is controlled by philanthropic trusts and not run as a family dynasty. .
India has been the fastest growing major economy for the past three fiscal years.
(Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group company.)