On 8th November (Wednesday), the U.S. International Development Finance Corporation (DFC) announced its commitment to provide $553 million in financing for a port terminal in Sri Lanka’s capital Colombo, which is partly owned by the Indian conglomerate Adani group. Notably, this is the biggest investment announcement by the American government’s financial arm, DFC in Asia.
The move comes as a strategic counter by two Quad partners India and the US against the Chinese expansionist designs of encirclement of India and not letting it gain hegemonic control in the Indian Ocean region.
Additionally, the development thwarts attempts by non-state actors and vested interest groups like short-selling firm Hindenburg and ilk that have been engaging in smear campaigns against Indian Infrastructure behemoth Adani group. While the conglomerate on its own has recuperated from the canards and hitjob, it has indirectly received another stamp of authority, this time from the American government’s financial arm, DFC.
The development underscores that international investment firms and institutions, conducting thorough due diligence before making investments, have discerned the groundless nature of the accusations. Despite this, they have chosen to proceed with substantial investments in the Adani group. This strategic investment by DFC is indicative of how the Indian conglomerate Adani group has been acting as a bulwark against Chinese deep pockets gobbling smaller nations one after the other.
Interestingly, India’s Adani group has been developing projects mirroring the Chinese ports that could in isolation undermine India’s interest in these geo-strategic locations in our vicinity or the Mediterranean. Here are some of the key investments of the Adani group that pose a strategic counter to China’s BRI and also to the ‘string of pearl’ strategy.
Adani counters China’s presence in Sri Lankan waters
China gained control over a terminal in Sri Lanka’s Colombo port through its notorious debt trap strategy, posing a serious risk to India. However, in 2021, Adani forged a deal with the state-owned Sri Lanka Ports Authority. The deal was to develop and run the strategic Colombo Port’s Western Container Terminal. The Build-Operate-Transfer deal, amounting to $700 million, marked the largest-ever foreign investment in the port sector of the island nation. Since then, the Adani group has been developing a terminal at Colombo port and squared off China’s advantage in the region.
Strikingly, the move wrestled back India’s influence in the Island nation especially after the Lankan government had pivoted to Beijing as the latter splurged the Island nation with its debt-fueled projects. Establishing a strategic presence in Colombo’s emerging port holds significant importance for India, especially in light of China’s development of the adjoining Colombo Port City—an ambitious financial hub resembling Dubai—and its operation of the Colombo International Container Terminals Ltd. This is because unchecked Chinese projects could have undermined India’s influence in Indian backwaters.
Moreover, the port battle in Sri Lanka holds significance as the island nation lies on key global shipping lanes and China’s move was seen as a part of its encirclement strategy.
Subsequently, Adani also replaced China in solar projects. It unfolded after Sri Lanka cancelled Chinese solar projects on islands in the Palk Strait, located between India and Sri Lanka, reportedly citing security apprehensions raised by New Delhi.
By early 2022, Adani had entered into a Memoranda of Understanding (MoU) to develop 500 megawatts of renewable energy projects in Pooneryn and Mannar, northern districts in proximity to India.
Katharine Adeney is a professor and expert on South Asian politics at the University of Nottingham. Speaking to Bloomberg last year, she said, India “is worried about Chinese access to the Indian Ocean, and being encircled by Chinese friendly regimes in Pakistan, Sri Lanka and Bangladesh.” She added that Adani’s supplanting of China’s solar power projects represented “a strategic move and one that we are likely to see more of.”
Samantha Custer is the director of policy analysis at AidData, a research unit at William & Mary University in Virginia. Speaking to Bloomberg last year, she said that India likely has a vested interest in having one of its own companies build a port terminal close to China’s own port project. However, she noted that Indian companies are often disadvantaged due to Beijing tying project finance to implementation by state-subsidized Chinese firms.
Adani port at Haifa coupled with IMEEC would overshadow China’s nefarious play in the Middle East
To bolster its BRI project, China bagged a port in Haifa in 2021. Since then, China’s Shanghai International Port Group has operated a port at Haifa. With this, China gained increased access to European markets as Haifa is a major trade hub on the Mediterranean. Notably, Haifa is one of the main seaports in Israel with virtually the entire trade moving in and out of the country by sea.
Further, it is well-documented that China deploys tactics of industrial espionage and sneaking military presence in its ports. However, the Chinese move was matched soon after as Adani also bought another port close to China’s project taking away its leverage of being a sole player and dominating the region. In collaboration with a local company, Adani oversees the Haifa Port in northern Israel, following its acquisition for $1.03 billion completed in January of this year.
India’s presence mirroring China at every step checks the nefarious designs of the communist regime. It also boosts India’s trade ambitions of enhanced connectivity with the Middle East and Europe along with posing a counter to the BRI as the IMEEC is seen as a slingshot to China’s BRI.
It is important to note that Haifa is now integral to the India-Middle East-Europe Economic Corridor (IMEEC), announced during India’s G20 Presidency. IMEEC includes two corridors: one connecting India to the Arabian Gulf and the other linking the Gulf to Europe. It features a railway for efficient cross-border transit, enhancing trade among India, the UAE, Saudi Arabia, Jordan, Israel, and Europe. Although it has faced serious challenges in the wake of the Israel-Hamas war, the Haifa port will only serve India’s enhanced trade ambitions in the long run.
Meanwhile, on the domestic front, Adani’s recently established port in Kerala at Vizhinjam is set to enhance India’s competitiveness against China in trade and manufacturing. Situated near the southernmost tip of the country, the Vizhinjam transshipment container port, a pioneering initiative in India, positions the country to increase its share in the global maritime trade, challenging China’s dominant position.
Adani group’s open admission of aggressively locking horns with the dragon
Last year in September, the Chairman of Adani Group, Gautam Adani emphasised that the group would utilise opportunities created because of the decline of China’s project to spread a global footprint. Referring to China’s tumultuous BRI project, he said, “I anticipate that China, which was seen as the foremost champion of globalisation, will feel increasingly isolated. Increasing nationalism, supply chain risk mitigation, and technology restrictions will have an impact.”
Prior to that in July last year, Gautam Adani told shareholders that he sought a “broader expansion” beyond India’s borders with “several” foreign governments approaching his conglomerate to develop their infrastructure.
While the Adani group is giving the Chinese regime a run for its money on every project that poses a threat to Indian interest or territorial security, inside or outside India, Gandhi scion, and Wayanad MP Rahul Gandhi has been launching a tirade against the Adani group without giving a shred of evidence to back it up. The vicious cycle of attacks has prompted several political pundits and netizens to rekindle the controversial 2008 MoU which was kept hidden from the general public for years.
Congress’ alleged connection with China: MoU with CCP, funds to Rajiv Gandhi Foundation and more
One of the main reasons for the Congress Party’s peculiar stance regarding China stems from the 7 August 2008 agreement between the Sonia Gandhi-led Congress Party and the Communist Party of China (CPC).
During UPA1 in 2008, the Congress Party and the Communist Party of China (CPC) signed an MoU in Beijing to exchange high-level information and cooperation between them. The memorandum of understanding (MoU) also provided the two parties with the “opportunity to consult each other on important bilateral, regional and international developments”.
The 2008 MoU between CCP and Congress came at a time when the Left parties in India had expressed a lack of trust in the UPA-1 government led by Congress.
Not just the MoUs, but the close relationship between the Chinese leadership and the Congress party, especially Rahul Gandhi came to the fore a few years ago during the Doklam stand-off when Rahul Gandhi was caught secretly meeting Chinese officials.
Apart from that, back in 2020, details about the Rajiv Gandhi Foundation’s (RGF) monetary operations emerged. OpIndia had previously published detailed pieces about the Chinese government’s financial contributions of more than Rs 1 crore to RGF since 2006.
