The Billionaire Raj

by James Crabtree

  Goods of all descriptions were stacked up around the port. Giant industrial pipes stood in triangular piles. Thick tree trunks lay in rows, stripped of leaves and branches. Thousands of colorful Maruti Suzuki cars lined up in nearby yards, ready to be driven into containers and stacked ten deep on a waiting ship. Orange excavators crawled over small mountains of recently arrived coal, preparing to shift it into waiting wagons. I searched for stevedores as the cranes whirred overhead, but found the dockside almost entirely empty of people. The tall red and white striped chimneys of a power station rose up further along the coast, fueled with coal from Indonesia and built by migrant Chinese workers.

  There are many places you might visit to see the changes brought by India’s new era of globalization, from the software parks of Bangalore, where Vijay Mallya also based his businesses, to the banks and stock markets of Mumbai. But few offered sights as dramatic as the long, jagged coastline of Gujarat, the state that juts out sharply from the country’s western flank. Bordering Pakistan on one side, its proximity to the Persian Gulf had long provided a natural landing point for merchants and migrants. Zoroastrian refugees arrived here from Iran as early as the seventh century, forming what became the Parsi community, one of the India’s more commercially successful minorities. In 1608, in the southern coastal town of Surat, the East India Company established its first “factory,” a trading post of fortified warehouses packed with silk, indigo, and saltpeter, waiting for galleons to haul it back to Britain. More modern factories, in what had since become a bustling city, now imported, cut, polished, and re-exported almost all of the world’s diamonds. In the meantime the surrounding region had once again become India’s gateway for global commerce, and host to some of the grandest endeavors of its tycoon class.

  It was here at Jamnagar, just over the waters of the Gulf of Kutch, that Mukesh Ambani’s Reliance Industries built its gigantic petrochemicals and refining complex, by some measures the largest of its type in the world. Another refinery stood just next door, built by the billionaire Ruia brothers of Essar, while the Jindals, another storied business dynasty, ran power plants and steel mills further south. The Gujarati coast was dotted with facilities to welcome container ships, oil tankers and liquefied natural gas carriers. However, commerce in the state had come to be associated with the extraordinary rise of one man more than anyone: Gautam Adani, perhaps the most aggressive of India’s new generation of tycoons.

  I had squeezed into the plush leather seats of one of Adani’s private jets earlier that morning in mid-2013, ready to visit Mundra, an isolated coastal town about 350 kilometers to the west of Ahmedabad, the commercial capital. The surrounding area was little more than scrubland before Adani, at the time merely an ambitious local businessman, got his hands on it about a decade earlier. Now it was the crown jewel of his business operations, including India’s largest private port, a giant coal-fired power station and a sprawling special economic zone spread out over more than 30 square miles. Reaching the port took eight bumpy hours by road, the pilot told me, looking over his shoulder and yelling over the noise of the engines. In the twin-engine eight-seater we touched down in less than one.

  Adani’s own background was modest. A college dropout from a middle-class family of textile merchants, he began his career in Mumbai’s diamond markets before returning home to Gujarat to work in a small plastics factory run by one of his brothers. Eventually he set up his own commodities trading business. Then, expanding at a pace that often looked reckless, he launched successive new ventures spanning ports, infrastructure, power, mining, and property. At the start the tycoon was a minor figure, unknown outside his home state. But fueled by quantities of debt that easily outstripped those built up even by adventurous tycoons like Vijay Mallya, Adani became one of India’s most successful self-made industrialists in less than ten years.

  The pace and scale of Adani’s expansion drew comparison with industrial giants of earlier eras. Unable to rely on India’s ramshackle infrastructure, the tycoon built his own private railways and power lines. Lacking easy access to domestic coal, he bought mines in Indonesia and Australia, and took their contents back home through his port. In the process he built “a vertically integrated global supply chain reminiscent of when Henry Ford once owned Brazilian rubber plantations to supply his car factories,” as the New York Times put it.1 More to the point, his was an expansion that closely mirrored India’s own. As the country enjoyed its fastest ever growth in the mid-2000s, so Adani undertook one of its most extravagant investment sprees. In 2002, Adani Enterprises, his main holding company, was worth barely $70 million.2 A decade later he claimed to have built assets worth $20 billion, while the value of his companies had jumped more than one hundredfold.3 By the time of India’s most recent election in 2014, Forbes listed his fortune at $7 billion.4

  Above all, Adani’s controversial reputation rested on a final factor: his friendly ties to Narendra Modi, the man who would go on to become India’s prime minister. Adani’s businesses began taking off in the years following Modi’s arrival as Gujarat’s chief minister back in 2001. Under Modi the state grew into a vibrant industrial hub, with a particular strength in export-focused manufacturing, even drawing comparisons with the Pearl River Delta, the region around Hong Kong that powered China’s transformation into a global trading giant.

  The two men enjoyed symbiotic careers. Modi’s pro-business policies helped Adani expand. Adani’s own companies, meanwhile, built many of the grand projects that came to symbolize Modi’s “Gujarat model,” with its emphasis on infrastructure investment, attracting foreign capital, and export industries. There were temperamental bonds too: both were self-made men with little formal education; both were traditional in their tastes, guarded of their privacy, and distrustful of outsiders; both spoke in halting English; both, in general, avoided talking to the press. Where other Gujarati industrialists like Mukesh Ambani often settled in Mumbai, Adani stayed in Ahmedabad, becoming the state’s most recognizable businessman. The duo were said to get on well. Adani was loyal, too, defending Modi in the aftermath of the bloody Hindu–Muslim riots that hit Gujarat in 2002, a time when Modi faced fierce public criticism.5

  Symbols of Adani’s wealth were hard to escape around the state. Adverts for his office blocks and residential property projects dotted roadsides in Ahmedabad. At the airport our plane passed a handful of other Adani private jets idling on the runway, all bearing the tycoon’s distinctive purple livery. This fleet of aircraft drew political controversy the following year, when it emerged they had ferried Modi around India to speak at rallies during his campaign to become prime minister.6 Both sides denied anything untoward, claiming the jets were part of a long-term leasing arrangement. But this did little to stop critics attacking a perceived coziness between the politician who so often railed against crony capitalism and the tycoon whose businesses had blossomed on his watch.

  There was controversy too about the large expanse of land onto which our plane touched down an hour later, at an airfield built by Adani’s company. A sign in purple letters above the terminal read: “Welcome to Adani Ports and SEZ.” India had begun developing special economic zones—or SEZs for short—during the 2000s, inspired by the trade-friendly enclave set up in Shenzhen by Communist Party leader Deng Xiaoping in 1980, whose exporting industries helped to kick off China’s own economic transformation. Most of the Indian zones flopped, although Adani’s did better, a fact its owner put down to canny management.7 Critics, including Congress leader Rahul Gandhi—Sonia Gandhi’s son, and the latest in the Nehru–Gandhi dynasty to lead his party—pointed to different factors. Specifically, Gandhi accused the tycoon of benefiting from favorable deals, arguing that he had acquired land from Gujarat’s government at advantageous rates.8

  Back at the port, the facility’s amiable chief executive, Captain Unmesh Abhyankar, talked excitedly about the mechanics of the place: a world of berth occupancy, t
hroughput rates, and turnaround times. Mundra had an unusually deep harbor, allowing it to attract some of the world’s biggest cargo ships, he explained, giving it an edge over rivals elsewhere along India’s western coast. “We focus on the three Cs: coal, containers, and crude,” he said of the cargoes his ships brought in. Exports were more of a mishmash, including everything from bauxite and cars to iron ore and wood. India’s dilapidated road network made it hard to move this in and out, so Adani built a 60-kilometer private freight line to the main rail network. Most Indian ports were state owned and inefficient, taking a couple of days or more to unload a ship.9 At Mundra, however, cargo was mostly whisked in and out over a morning. Abhyankar expected his facility to become the country’s largest port later that year, handling 100 million metric tons of goods, the first in India ever to do so.

  Even at dusk the giant container cranes were easy to spot from the window, as our plane took off that evening and flew us back to Ahmedabad, ready to meet Adani the next day. The day’s last light glinted on the gray of the Gulf of Kutch in the distance. A few years earlier a team of oceanographers had found an ancient stone anchor lying 50 meters below the waves, of a type used by merchants more than a millennium before.10 For centuries, those same waters had been India’s trading artery, bringing wooden dhows and steamships across from Africa and the Middle East. Through such trade and commerce, India had been an early pioneer of globalization, at least until Nehru launched his new age of self-enclosure in the aftermath of Independence in 1947.

  Now the ships docking at Mundra harked back to those earlier eras, from the ninth-century Chola dynasty, which forged ties from Babylon to China, to the Emperor Babur in the early sixteenth century, whose Mughal dynasty traded on favorable terms with the Portuguese, Dutch, and British. India’s record in colonial times was less impressive, as centuries of exploitation left its economy barely larger in the mid-twentieth century than it had been when the East India Company first seized territory in the 1600s.11 Yet even then India remained closely tied to the world economy and played a sizable role in global events. The Indian army supplied millions of men for Allied efforts in both world wars, fighting across Africa and Europe. Holding only a blue British-Indian passport, Indians were free to travel throughout the empire, as Gandhi did when he studied in London then practiced law in South Africa. Chants from Gujarati temples still spill out onto the streets of Nairobi and Dar es Salaam in eastern Africa, while the strains of the Gujarati language can be overheard in the school yards of Leicester and Edison, New Jersey. In America, roughly a third of all motels are owned by families of Gujarati descent.12 Drawn outwards by commerce, “Gujjus” became India’s consummate globalists. In novels and Bollywood movies, they are portrayed as traders and wheeler-dealers, a reputation that extended most obviously to Adani himself.

  So rapid had Adani’s rise been, and so large did his holdings become, that he eventually attracted the attention of Paranjoy Guha Thakurta, a veteran journalist who made it his business to pore over the dealings of India’s more controversial business empires. Guha Thakurta made his name taking on the Ambani brothers in a controversial 2014 book called Gas Wars: Crony Capitalism and the Ambanis, which detailed the fierce disputes between the two men’s respective energy businesses following their 2005 divorce. In the book he laid out various allegations of cronyism, which both Ambani brothers denied, and which Mukesh Ambani’s Reliance Industries countered with an unsuccessful defamation suit. Undeterred, Guha Thakurta turned next to Adani, a man who was viewed by many in India as the purest inheritor of the industrial spirit of the Ambani family. For all Adani’s undoubted talents in business, Guha Thakurta questioned whether it was in part his political connections, rather than just his entrepreneurial abilities, that explained the secret behind the tycoon’s rapid entry into the upper echelons of the super-rich.

  “His is a truly remarkable story,” Guha Thakurta told me a few years after my visit to Mundra. We were sitting drinking tea in his higgledy-piggledy office on the upper floor of a colonial-era home in one of the nicer neighborhoods in central New Delhi. Guha Thakurta himself looked every inch the agitator, with wild curly hair and the well-worn clothes of an elderly academic. At the time, he was editor of the Economic and Political Weekly, a storied but generally little-read journal of the Indian left, whose weekly editions were printed on cheap paper and filled with dense argumentation. But while his publication’s prose could be heavy going, Guha Thakurta in person talked with great animation, galloping through sentences as he explained the scale of Adani’s achievements and the various ways in which he had pushed his way to the top of India’s billionaire class.

  After building Mundra, Guha Thakurta explained, Adani went on to buy or build half a dozen other ports around India, making him the country’s largest port owner. He was the largest private electricity producer too, even though he had opened his first coal-fired power station less than ten years before. He was also getting big in solar, having unveiled the world’s largest plant in Tamil Nadu, in southern India. Even further south, in Australia, close to the Great Barrier Reef, Adani was midway through building a controversial mining and shipping complex, whose vast scale attracted the ire of global environmental groups. Adani’s dozens of other corporate entities variously built office parks, traded diamonds, and imported oils made from soybeans, sunflowers, mustard, and rice. “He even dominates in fruit!” Guha Thakurta said with a final flourish, noting that one Adani company was India’s largest supplier of apples. “More than almost any billionaire in India, his has been a meteoric rise,” Guha Thakurta told me. “The question is: Just how did he do all this?” And behind that question lay a deeper issue: Just how had India’s billionaire boom come about in the first place?

  A New Billionaires’ Club

  Jayant Sinha first began pondering India’s new super-rich during his time at McKinsey, the management consultancy. Sinha joined the firm in the 1990s, eventually rising to become a partner, opening its first office in Mumbai and winning its first Indian clients. He was an adviser who inspired confidence: precise in his language and elegant in his dress, with rimless glasses and neat thinning hair. Although born in India, his accent retained an American twang, the legacy of studying at Harvard Business School and working on the US East Coast. Business often took him back to India during the mid-2000s, when the economy and stock market were booming. Back then, as Sinha moved around the upper reaches of his country’s business elite, it was not just the quantity of new wealth that struck him, but the way it was being made. “The more I looked, the more worried I became,” he told me when we met at his home in New Delhi in 2017, recalling India’s business scene more than a decade earlier. “It was very clear that there was a rigged game going on.”

  There were no Indians on Forbes’s annual billionaire rankings until the early 1990s. The four Indian-born Hinduja brothers—today the richest family in the UK, with a combined fortune of $15 billion—did make the list, but their businesses were mostly registered in Switzerland or London, so they counted as British.13 A smattering of names then began to appear, starting with Kumar Birla, head of the venerable Birla conglomerate. Dhirubhai Ambani inched his way on next, along with Lakshmi Mittal, a pugnacious steel maker, and Sunil Mittal, a telecoms tycoon, and one of the few men able to challenge Gautam Adani for the title of India’s most successful first-generation entrepreneur. Dozens more then joined their ranks after the turn of the millennium, as each year’s list came in fatter than the last. Some new arrivals, like Adani, made their own money. Others like Vijay Mallya expanded what they inherited. In 2010 Forbes ranked two Indians—Mukesh Ambani and Mittal—among the five richest men in the world.14 Four years later India’s billionaire total crossed over one hundred, with Adani’s fortune jumping most of all, up $4 billion in that year alone.15

  But how rich were India’s billionaires compared to those in other countries? Nobody seemed to know. In 2008, Sinha tried to find out. Plow
ing through old editions of Forbes, he typed each tycoon’s worth into an Excel sheet, including the size of the economy of their home countries. The results were stunning. Measured relative to gross domestic product, India came second only to Russia for the proportion of national wealth held by its very richest people. “One tends to think of India as a poor country, and to find that India has a concentration of wealth which is almost literally at the top of the charts was quite astonishing,” Sinha told me of his early research.

  Russia boasted eighty-seven billionaires, at a time when the country’s economy was worth roughly $1.3 trillion. But Sinha’s spreadsheet showed that India came in not far behind, with fifty-five in an economy that at the time was only a fraction smaller. India’s ratio was also well ahead of countries like America and Brazil, both of which were known for their stark extremes of wealth.16 “We had been running a socialist economy for so long,” Sinha said. “And in only fifteen or sixteen years we had created this incredible wealth concentration, perhaps more quickly than any country in history.”