New Delhi:
India is poised to become a 21st-century economic powerhouse, offering an alternative to China for investors looking for growth and for reducing supply chain risks with Prime Minister Narendra Modi and industrialists Gautam Adani and Mukesh Ambani playing a fundamental role in shaping the economic superpower the country will become in the coming decades, according to a CNN report.
The report says to spur growth, the Modi government has begun a massive infrastructure transformation by spending billions on building roads, ports, airports and railways.
It is also heavily promoting digital connectivity, which can improve both commerce and daily life.
According to the statement, Mr Adani and Mr Ambani have emerged as crucial allies as the nation embarks on this transformative journey. India, with a projected worth of $3.7 trillion by 2023, has risen to become the world’s fifth-largest economy, surpassing the United Kingdom after climbing four positions in the rankings during PM Modi’s ten-year tenure.
While the country is expected to sustain a growth rate of at least 6 percent in the upcoming years, experts suggest that India should aim for a growth rate of eight percent or higher to attain the status of an economic superpower. This sustained expansion will propel India further up the ladder of the world’s largest economies, with some analysts predicting that it will secure the third position, trailing only behind the United States and China, by 2027.
The Adani Group and Reliance Industries, both colossal conglomerates valued at over $200 billion each, have established their presence in various sectors, including fossil fuels, clean energy, media, and technology.
The duo’s adeptness in investing in sectors prioritized by Prime Minister Narendra Modi, who is currently campaigning for his third consecutive term, has garnered praise from investors. India is on track to emerge as a major economic force in the 21st century, providing an attractive option for growth-seeking investors and manufacturers aiming to diversify their supply chains. PM Modi, Mr. Ambani, and Mr. Adani are pivotal figures in shaping India’s economic future, according to the report.
The report also highlighted the significant power and influence wielded by the two Indian businessmen, drawing parallels with historical figures from countries undergoing rapid industrialization. Mr. Adani and Mr. Ambani are often likened to John D. Rockefeller, America’s first billionaire during the Gilded Age in the late 19th century.
James Crabtree, author of The Billionaire Raj, noted that India is experiencing a transformative phase similar to that of other nations in the past, such as Britain in the 1820s, South Korea in the 1960s and 70s, and China in the 2000s.
Mumbai, known as India’s financial capital, bears the influence of the two prominent tycoons in various aspects. Adani Realty’s name is emblazoned on towering residential buildings, while cultural institutions are named after the Ambani family. Even the international airport is operated by Adani. One notable landmark is Antilia, the extravagant personal skyscraper of Ambani and his family. This opulent structure, costing a staggering $2 billion, features luxurious amenities such as a spa, three helipads, and a 50-seat theater. Situated on what is known as ‘Billionaires’ Row,’ this 27-story building with its striking geometric design dominates the surrounding neighborhood.
The CNN report also highlights the lavish pre-wedding celebration of Anant Ambani, son of Mukesh Ambani, which took place in Jamnagar earlier this year. The event attracted billionaires and movie stars from across the globe, including notable figures like Mark Zuckerberg, Bill Gates, and Ivanka Trump. With performances by popstar Rihanna and magician David Blaine, the three-day celebration captivated India and further showcased Mr. Ambani’s increasing global influence.
According to Guido Cozzi, a macroeconomics professor at the University of St Gallen in Switzerland, these conglomerates hold significant importance and possess strong connections. He emphasizes that both the Adani Group and Reliance Industries were established long before Prime Minister Modi assumed power, and they are far from being stagnant monopolistic entities. Instead, they are highly dynamic and actively contribute to the country’s growth. Not only do they play a crucial role in developing infrastructure, which directly fuels growth, but they also indirectly contribute to the country’s expansion by enhancing connectivity through digital innovation.
Reliance was established by Dhirubhai Ambani, the father of Mr. Ambani, as a small yarn trading firm in Mumbai in 1957. In the following decades, it expanded into a vast conglomerate encompassing energy, petrochemicals, and telecommunications.
Mukesh Ambani has not only disrupted India’s telecom sector within a short span of time but has also emerged as a key player in various sectors such as media and retail.
The report highlights that Mukesh Ambani’s ambitious nature and rapid pace of growth are comparable to Mr. Adani, who oversees businesses ranging from ports and power to defense and aerospace.
Starting as a first-generation entrepreneur, the 62-year-old began his career in diamond trading before establishing a commodity trading business in 1988, which eventually transformed into Adani Enterprises Limited (AEL).
As per a January report by American brokerage firm Cantor Fitzgerald, AEL is considered fundamental to India’s objectives. It serves as an incubator for Mr. Adani’s ventures, many of which have emerged as leaders in their respective industries. Cantor notes that the company’s current focus on airports, roads, and energy presents a distinctive long-term investment prospect.
The report points out that while both tycoons amassed a significant portion of their wealth from fossil fuels, they are now channeling billions into clean energy. This shift towards green energy coincides with India’s ambitious climate targets.
Despite India’s economic growth, the report underscores the persistent challenges of escalating youth unemployment and inequality. In 2022, the country ranked 147th in terms of gross domestic product (GDP) per capita, a key indicator of living standards, according to the World Bank.
Opposition parties in India have criticized the BJP-led government, alleging close ties with the country’s wealthiest individuals and questioning the rapid ascent of Mr. Adani.
The report raises concerns about PM Modi’s perceived connections with billionaires, which have once again become a topic of debate among rivals during the Lok Sabha elections.
Under the leadership of PM Modi, significant reforms have been implemented in certain areas such as the transparent allocation of India’s natural resources and the revamping of the country’s bankruptcy laws. These reforms have been acknowledged as important steps forward.
According to a report, there are experts who argue that a certain level of closeness between politicians and business elites can contribute to the nation’s faster growth. However, the report also emphasizes the need for India to foster entrepreneurship and innovation, thereby encouraging the entry of more firms into the market. This is particularly crucial considering the large number of individuals joining the labor force each month, as the economy cannot solely rely on a few conglomerates to absorb this workforce.
Rohit Lamba, an economist at Pennsylvania State University and co-author of the book “Breaking the Mould,” praises the entrepreneurial spirit of Indian businessmen who have managed to achieve steady growth and development in the country’s dynamic and sometimes chaotic political and business environment.
Lamba further emphasizes that India should not solely rely on a few major firms like Adani or Ambani to drive economic growth. Instead, the country should focus on nurturing the growth of more firms to ensure a more inclusive and sustainable development path.
The report also highlights the presence of other conglomerates in India, such as the Tata Group, which holds significant influence in key sectors like steel and aviation. However, the Tata Group often faces less scrutiny compared to newer conglomerates, mainly due to its governance structure being controlled by philanthropic trusts rather than being run as a family dynasty.
It is worth noting that India has been the fastest-growing large economy over the past three financial years, showcasing its potential for continued growth and development.