Competition is getting intense between Gautam Adani and Mukesh Ambani. Who is going to be the world’s number 1? Is Modi stuck between both friends?

The rivalry between Mukesh Ambani and Gautam Adani is becoming more and more heated. Who will rank first in the entire world? Modi is confused between his two friends.

Mukesh Ambani and Gautam Adani had to tread carefully for years in order to reach the top two rungs of Asia’s wealth ladder. While one dominated telecommunications and retail, the other dominated transportation and energy distribution. The two billionaires from India’s Gujarat state, on the other hand, are increasingly overlapping, setting the stage for a clash that could change the country’s business landscape. Given the duo’s proximity to politics, the shock is sure to reverberate throughout the halls of power.

Bloomberg News reports that the Adani Group has discussed purchasing a stake in Saudi Aramco from the oil-rich kingdom’s Public Investment Fund as part of a larger tie-up or asset swap deal. This comes just months after Ambani’s Reliance Industries Ltd. and Aramco called off two years of negotiations to sell 20% of the Indian conglomerate’s oils-to-chemicals unit to the Saudi behemoth for $20 billion to $25 billion in Aramco shares. In an effort to strengthen the partnership, Reliance even recruited Aramco chairman Yasir Al-Rumayyan to join its board as an independent director last year.

Ambani’s Reliance, which owns the world’s largest refining complex in Jamnagar, Gujarat, is still a better fit for Aramco, the world’s largest crude oil producer. Reliance is also a major manufacturer of polymers, polyester, and fibre intermediaries. Adani, on the other hand, has expressed an interest in entering the petrochemicals industry, with plans to build a $4 billion acrylics complex near his Mundra port in Gujarat in collaboration with BASF SE, Borealis AG, and Abu Dhabi National Oil Co., or Adnoc. Covid-19, however, thwarted the plan. This was not his first retreat from his petro-ambitions: a plant in Gujarat that hoped to attract Taiwan’s CPC Corp failed to materialise.

Adani’s primary interest in hydrocarbons is still coal. He mines it in India and Indonesia, generates coal-fired electricity at plants like Mundra, and berths ships loaded with it at his vast network of ports. After a decade of battles over the controversial Carmichael mine in Australia’s Galilee Basin, the group announced in December that coal exports would begin soon. However, while coal is a significant part of India’s past and present, it is not the future. That is why Adani made such a large investment in solar power. He also started circling plastics.

After establishing a new petrochemicals subsidiary last year, Adani made it clear that he intended to challenge rival group founder Dhirubhai Ambani, India’s “Polyester Prince” (and father of Reliance’s current CEO). The intriguing question is whether Adani’s plans include the construction of a refinery.

Aramco and Adnoc announced plans in 2018 to build a massive $44 billion refinery in collaboration with state-owned Indian firms. The project’s original site in India’s Maharashtra state was lost due to local political opposition. Could the Adani Group help bring that project back to life? According to Bloomberg News, preliminary discussions with Aramco appear to be focused on renewable energy, crop nutrients, or chemicals. If Aramco continues to be interested in acquiring a captive refinery in India, the terms of its Adani partnership may be expanded.

This would pit billionaires against billionaires for the first time. Ambani informed his shareholders in June of last year that he was embarking on the “most difficult” undertaking of his life by transitioning to clean energy and fuel. He then went on a field-acquiring binge. Previously, Adani aimed to become the world’s largest producer of renewable energy by 2030. Ambani vaulted Reliance to the forefront of India’s climate-change narrative when he announced plans for four gigafactories in Jamnagar, one for solar panels, batteries, green hydrogen, and fuel cells. And he did it just days before the COP26 summit in Glasgow, where Prime Minister Narendra Modi made an audacious pledge to reduce India’s reliance on fossil fuels.

Analysts like to think of Ambani and Adani as a kind of India Inc. duopoly. “By supporting the ‘2As’ at the expense of other companies, both domestic and foreign, the government is encouraging an extraordinary concentration of economic power,” economist Arvind Subramanian, an adviser to the Modi administration until 2018, and Josh Felman, a former IMF official in New Delhi, wrote in a recent Foreign Affairs article about how India’s inward turn could stymie its rise.

The two superstar business groups are indeed reducing the competitive intensity in the broader economy by swallowing smaller and weaker firms adjacent to their operations. Regardless, all signs point to them competing fiercely. Ambani took the telecom route to become India’s consumer data czar; Adani wants to enter from the other end by providing green energy-powered storage services for bits and bytes. Ambani is fighting Amazon.com Inc. for control of the grocery supply chain. Adani owns the country’s leading edible oil brand and warehouses grain for the state-run Food Corporation of India.

Their balance sheets aren’t the same. Over the last five years, Adani-linked companies have been the most active in the international debt market, borrowing more than any other Indian company. Meanwhile, Ambani has transformed Reliance into a sparsely leveraged fortress—not a bad place to be as global interest rates rise. Visions vary as well. While Adani, 59, provides grid power (and cooking gas through a partnership with France’s TotalEnergies SE), Ambani, five years older, envisions a future in which “every house, farm, factory, and habitat could, in principle, free itself from the grid by generating its own power.”

Why is Modi confused between both Ambani and Adani?

As defence minister Manohar Parrikar met with his officials on Thursday to discuss the weapons platforms and systems that the country needed to acquire, defence circles in Delhi and abroad speculated that “the Modi government will clear the way for the Ambanis and Adani to capture the Indian defence industry by making their groups strategic partners.” But nothing like that happened. As of today, only the Tatas, Mahindras, and L&T have any meaningful role in the Indian defence industry; the Ambanis (both brothers) and Adani are trailing in the race, despite widely held perceptions that they are ruling the roost under the Narendra Modi government.

Perceptions are distinct from facts. However, perceptions are more important in politics than facts. That is why, according to our opposition leaders in general, and Congress vice president Rahul Gandhi in particular, everything in the country has been done to promote the interests of a select group of industrialists (particularly the Ambanis and Adani) at the expense of the country’s poor since Modi took office.

According to Gandhi, the entire demonetisation scheme of the Modi government is only for the benefit of the country’s wealthy businessmen. Almost every public rally he addresses emphasises Modi’s’suit-boot ki sarkar’ (a government that caters to capitalists) 

Modi, for his part, expresses his concern for the poor on every public platform available in the country. He relentlessly promotes his various pro-poor schemes, including Jandhan accounts, Swachh Bharat, Make in India, and Clean-Ganga initiatives. That these are really ambitious schemes that, as columnist social scientist Pratap Bhanu Mehta pointed out in The Indian Express, are poorly implemented, and that the majority of these are projects whose results will come later, not sooner, are entirely different issues. But the point is that the Modi administration is not the pro-rich one that Rahul Gandhi and Arvind Kejriwal accuse it of being.

In this context, The Times of India reports that the BJP compiled and released data “to nail the claims that the NDA dispensation is ‘Adani-Ambani ki Sarkar.” Loans worth Rs 36.5 lakh crore were allegedly waived off to various corporates between 2005 and 2013, during the Congress-led UPA government led by Manmohan Singh’s two consecutive terms. 

In response to recent allegations that the BJP waived “bad loans” to a few corporates, the BJP provided data indicating that the ratio of “bad loans” increased by 133% between 2005-06 and 2013-14. “SBI had frozen all the Vijay Mallya group’s accounts after he failed to repay loans totaling Rs 1,450 crore in 2012,” BJP spokesperson Shrikant Sharma said. Mallya, on the other hand, received loans worth Rs 1,500 crore… Adani, Ambani, and Mallya are not new…they are as old as the Congress party and have thrived since Rahul Gandhi was not even born. As a result, Congress owes more explanations about how these groups thrived despite having a tainted background.”

The BJP data has some merit. Consider Reliance’s significant and costly investments in gas extraction in the Krishna-Godavari basin. Let us recall how, just a few days before the UPA government was defeated in 2014, Manmohan Singh’s oil minister, Veerapa Moily, decided to raise the gas price by $8-8.4 per million British thermal unit, compared to the then-current price of $4.2 per million British thermal unit. In contrast, the Modi government has imposed thousands of crores in fines on Reliance (first Rs 14000 crore and then an additional Rs 2500 crore for “under-production”; and Rs 10311.76 crore for “extracting gas from state-run Oil and Natural Gas Corp. Ltd’s deep-water block in the Krishna-Godavari basin for seven years”). 

The company can legally challenge these penalties, but the point is that it is difficult to understand how a company perceived to be so close to the Modi government can be fined one after the other by the latter. Worse, there are reports that India will likely cut the price of natural gas by about 18 percent from the $5.05 per million British thermal units set by the government when it first rolled out the formula in 2014, which will be a huge setback for explorers like Reliance.

Concerning the Adani group, its promoter Gautam Adani has provided ample evidence to the press over the last three years detailing how his infrastructure empire grew following the country’s economic liberalisation under the Congress government led by Narasimha Rao in 1993. During the Congress governments of Chimanbahi Patel and Shankarsinh Vaghela, he acquired barren and non-agricultural land in Gujarat and built ports.

According to him, in his business, he has received cooperation from all governments, whether led by the BJP or any other party. It is not true that the State Bank of India loaned him Rs 62000 crore to start his mining business in Australia (where he has now got the environmental clearance) (where he has now got the environmental clearance).

In addition, both Reliance and the Adani group’s market capitalisation have suffered under Modi’s regime; in fact, the Adani group’s market capitalisation has reportedly fallen by 51% since Modi became Prime Minister. However, neither the Reliance (led by Mukesh Ambani) nor the Adani groups have missed any bank loan interest payments.

All of this suggests that the systematic way perceptions of the Modi government’s “nefarious nexus” with industry are being built is unfortunate. These perceptions are incorrect. Such perceptions harm the nation’s development. Wealth creation by industry is not a crime; rather, it is necessary for economic growth, job creation, and assistance to the poor, as long as it is done transparently and in accordance with the taxation regime.

But what should we do in response to politicians’ deliberate distortion of facts and outright lies? In a competitive democracy like ours, there is no simple answer. The media, in my opinion, can make a small contribution to resolving the situation. According to reports, some European publications include features such as “PolitiFact” or “Truth-O-Meter,” which range from “True” to “Mostly False,” “False,” and finally “Pants on Fire.”

The Washington Post has a regular feature called “The Fact Checker.” However, there are valid criticisms of these features. The argument here is that a journalist or analyst chooses facts subjectively. For example, one might be interested in seeing how much truth Rahul Gandhi is saying while ignoring Narendra Modi’s similar treatment. The opposite is also true.

But doing something is preferable to doing nothing. And it is entirely possible that when some subjective person separates facts from fictions by Rahul and another subjective person does the same with Modi, there will be some “balance” between the two sets of facts and fictions.