The ruling Bharatiya Janata Party (BJP) in India has accused the US State Department of attempting to “destabilize India” in collaboration with “deep state” elements. This accusation comes after the US indicted Indian billionaire Gautam Adani on charges of being involved in a $265 billion bribery scheme in New York to secure renewable energy contracts. Adani is a prominent figure in India and is close to Prime Minister Narendra Modi, who interpreted the indictment as an attempt to “tarnish India’s global image.” This is considered one of the most serious crises in Indo-US relations in the past decade, threatening the strategic partnership between the two countries and their shared objective of containing Chinese influence in the Indo-Pacific region. Indian political circles are hoping that President-elect Donald Trump will take a lenient stance on the matter and issue a pardon for Adani, thus resolving the crisis.
Multiple Dimensions
Over the past two decades, Washington and New Delhi have successfully built a multi-faceted strategic partnership, solidified during the Biden administration through the formation of regional alliances to counter China’s growing influence in Asia. Biden has described New Delhi as a “critical partner in balancing with Beijing.” The two countries have established various dialogue mechanisms, including bilateral talks between defense and foreign ministers. Therefore, India’s accusations against Washington of destabilizing its country constitute a serious political crisis with numerous dimensions:
Accusations of Destabilization by Washington: The BJP, led by Prime Minister Modi, issued a statement on December 5, 2024, published on social media (X), accusing the US State Department of attempting to “destabilize India.” The party statement elaborated: “The deep state has a clear goal of destabilizing India by targeting Prime Minister Modi. The US State Department is always behind this agenda; they funded the website (OCCRP), which acted as a media tool to spread misinformation about India and implement the deep state’s agenda.”
Impact of US Charges Against Indian Billionaire Gautam Adani: Indian political circles have linked the recent accusations against Washington to the US Securities and Exchange Commission’s (SEC) summons issued on November 24, 2024, to Indian billionaire Gautam Adani. US prosecutors in New York accused Adani and seven of his associates of multiple charges, including securities fraud and deceiving investors by concealing that his solar energy project in India was facilitated by “bribery.” American sources suggest Adani paid about 265 million in bribes to US government officials to secure solar energy contracts and financing for his companies, which were expected to generate 2 billion in profits.”
I removed the redundant and incorrectly formatted text within the original string, preserving the key information about the bribe amount (265 million) and the expected profit (2 billion)
In his first response to the charges, Adani denied them and asserted his compliance with US law. Adani Group clarified that the accusations relate to a single contract with Adani Green Energy, which constitutes approximately 10% of their operations. No charges have been filed against other companies in the group. The group further asserted that all allegations are “baseless.”
Controversy Surrounding Indian Government’s Favoritism Towards Adani: At 62 years old, Adani is an Indian billionaire ranked 25th on the list of the world’s wealthiest individuals. He is considered a close friend of Indian Prime Minister Modi. The Indian opposition accuses Modi of “favoring” Adani and awarding him contracts for infrastructure development in the country, including the redevelopment of a slum in Mumbai. They also accuse Adani of exploiting the country’s resources for his own gain by directing substantial funds from government institutions to invest in his businesses, in exchange for financing Modi’s election campaigns. Both parties have denied these accusations. It is noteworthy that the friendship between Modi and Adani dates back two decades, beginning when Modi was the Chief Minister of Gujarat, Adani’s home state.
Indian Opposition Exploiting American Criticisms of Adani: Leaders of the Indian opposition have seized upon the American criticisms of Adani to intensify their attacks on Modi’s government, given their close relationship. Leading this criticism is Rahul Gandhi, the leader of the opposition Indian National Congress party. He has demanded a discussion on the accusations against Adani, as they “have the potential to tarnish India’s image on the world stage.” The Indian parliament was suspended on November 25, 2024, after opposition members disrupted proceedings to demand a discussion on the bribery allegations against Adani Group.
Gandhi asserted that “Adani is still moving freely in the country despite a warrant for his arrest, clear evidence that the Prime Minister is protecting Adani and that he is involved in corruption cases related to Adani.” Opposition parties have called for a joint parliamentary committee to investigate the matter and investigate the Chairman of the Indian Securities and Exchange Board (SEBI). In response, the ruling BJP affirmed that “it is up to Adani Group to deal with and defend itself.” Although the matter is commercial, the accusations against Adani Group and its founder have strengthened the opposition parties led by Gandhi against Modi’s government. This comes amid growing criticism of Modi’s nationalist policies, which have been accused of persecuting minorities, particularly Muslims, coupled with reports criticizing the decline of human rights in India. This situation will likely weaken Modi’s political position in any upcoming parliamentary confrontation with the opposition.
Managed Differences
India’s accusations against Washington of attempting to destabilize its country are “the tip of the iceberg” hiding a number of controversial Indo-US issues. If the two countries fail to contain the current crisis related to the charges against Adani, the gap between them will widen, leading to numerous negative repercussions. However, the future of Indo-US relations will continue to be determined by several key factors:
Continued Belief in the Importance of Bilateral Strategic Partnership: New Delhi and Washington are bound by a strategic partnership and close cooperation in a number of areas, most notably the “Strategic Technology Partnership” within the “Critical and Emerging Technology Initiative” to enhance technological cooperation between the two. The two countries are also linked through security cooperation through the bilateral dialogue in the Indian Ocean, focusing on regional security. India participates in the “Minerals Security Partnership” launched by Washington, which focuses on securing reliable supply chains for critical minerals.
Regarding their security cooperation, the US Navy has started using Indian shipyards for repair work, and India allows the US access to strategic geographical locations, including conducting joint naval exercises in the Andaman and Nicobar Islands, overlooking the vital Malacca Strait. Joint Indo-US exercises, codenamed “Yudh Abhyas 2024,” were conducted in the Indian state of Rajasthan last September. This was the largest and most significant exercise since its inception two decades ago, marking the cornerstone of defense cooperation between the two countries. 1,200 soldiers from both sides participated, with the aim of conducting counter-terrorism operations in a semi-desert environment. Washington is also one of India’s top economic partners. Despite the difficulty of reducing the image of this cooperation due to the current crisis, given its strategic importance to both countries, it will be negatively impacted if the crisis persists and is not contained.
Limits of Widening Bilateral Differences in Foreign Policy Files: This year (2024) has witnessed some differences between India and the US foreign policy tracks. Washington supported the popular revolution that toppled the previous regime in Bangladesh, an ally of India. India opposed this, especially after the former Prime Minister of Bangladesh, Sheikh Hasina, sought refuge in India. Washington also threatened to impose sanctions on India after New Delhi signed an agreement in May 2024 to develop and operate the strategic Iranian port of Chabahar, overlooking the Gulf of Oman, for the next 10 years, for a total cost of $120 million.
On the other hand, India accused Washington of siding with Canada following the diplomatic crisis between New Delhi and Ottawa. In mid-October, the two countries exchanged “diplomatic expulsions” after Ottawa announced that the Indian High Commissioner to Canada might be involved in the case of the killing of a separatist Indian leader from the Sikh minority in the Canadian city of Vancouver last year.
Continued Cooperation Between India and Russia: India is a founding member of the BRICS group, established in 2007, led by Russia and China. This group has helped strengthen economic and political cooperation between India and Russia over the past two decades. BRICS promotes itself as aiming to express “the voice of the South” and transform the current international order into a multipolar system, a move that has raised concerns in Washington. Modi has attended all the group’s summits, visited Moscow this year, and reiterated his country’s refusal to impose economic sanctions on Russia following the ongoing Russian war in Ukraine since February 24, 2022. India has adopted a “balanced foreign policy” to achieve its economic and strategic interests, as it is one of the largest importers of Russian gas.
Washington is pressuring India to back away from its rapprochement with Russia and impose sanctions on it to tighten the siege on the Russian economy, but New Delhi refuses. Washington also fears the establishment of a new BRICS currency as an alternative to the dollar, a claim denied by Indian Foreign Minister Subrahmanyam Jaishankar on December 7, 2024, who affirmed: “BRICS countries have no interest in weakening the US dollar.” This statement came in response to remarks made by President-elect Donald Trump, in which he urged BRICS countries not to “create a new currency or support another currency to replace the dollar, or they will face tariffs of 100%.”
India’s Continued Importance to Washington’s Strategy to Contain China: New Delhi and Washington share a common regional goal: establishing a “free and open Asia.” To achieve this, Washington established the “QUAD” group, which includes the US, India, Japan, and Australia, all long-standing democracies with strained relations with China. The group aims to strengthen alliances among its members to contain China’s growing influence. Washington relies on India to become the cornerstone of its strategy to confront China, given the traditional rivalry between the two. Modi attended the group’s last summit, held in Washington in September 2024. The summit concluded with the need to strengthen security, political, and military cooperation among its member states to address common challenges. Washington seeks to shift the weight of international interactions to the Indo-Pacific region and assert its influence in the area through greater military and economic presence to contain Chinese influence.
Washington’s Attempt to Contain Tensions with India: Washington denied the BJP’s accusations against the US State Department of attempting to “destabilize India,” affirming that “it works with independent organizations in programming that supports professional development and capacity building for journalists, as Washington supports freedom of the press around the world.” Washington reiterated that “it is disappointing that the ruling party in India is leveling such accusations against Washington.”
President Trump’s Stance on Relations with New Delhi: Despite recent tensions with the US, Indian Prime Minister Narendra Modi described Washington as “an indispensable partner in India’s journey forward.” Therefore, Indian government circles are relying on the stance of President-elect Donald Trump on the Adani case, as he may issue an order to halt the legal pursuit against him. Notably, Modi praised Trump’s victory and announced that he would invest $10 billion in energy and infrastructure projects in the United States, creating 15,000 jobs. Maintaining the strategic partnership between New Delhi and Washington will contribute to the implementation of plans to contain China’s influence in the Indo-Pacific, in addition to exerting economic pressure on it. Trump has threatened to launch another economic war against China. Therefore, it will be essential for Trump to forge strategic relations with India and contain differences between them to rearrange regional balances on the Asian continent in the face of Chinese and Russian influence.
Conclusion: The current tensions between the US and India are unlikely to affect the future of the partnership between the two countries, especially given the many strategic interests that unite them. Moreover, these tensions coincide with the final days of the Biden administration, so India’s criticisms of Washington could be primarily directed at Biden. This may not have a significant impact on relations between India and the United States under Trump.
