India’s two richest men, Mukesh Ambani and Gautam Adani, sweated it out with the rest of the country’s elite as Narendra Modi was sworn in as prime minister for a third term during a multi-hour outdoor ceremony on Sunday.
The presence of the two billionaires was a clear reminder of how important they have been to the India that Modi, a fellow Gujarati, has presided over for the past decade.
Their conglomerates, Adani Group and Reliance, along with Tata Sons, have been deeply embedded in the prime minister’s development drive — building the roads, airports, mobile networks and renewable power capacity that have allowed Modi to boast of India’s economic progress.
But Modi’s new term, his first without outright command of parliament, heralds an uneasy new era for some of the country’s most important business leaders.
While they remain central to Modi’s vision for reshaping the country, the election outcome shows voters’ disquiet at an unequal sharing of the spoils of India’s rise — and offers a reminder of the power held by other leaders across the political spectrum.
For now it would be “business as usual”, said Bhaskar Chakravorti, dean of global business at The Fletcher School at Tufts University. Modi’s largely economically aligned coalition needs India’s powerful conglomerates to lay down big infrastructure projects to help realise Viksit Bharat, the prime minister’s vision to build India into a developed nation by 2047.
“The central message of the Indian voter this time is: less BS, more jobs,” Chakravorti added. “The national champions, Adani, Reliance, Tata have the scale, momentum and relationships with enough people on either side of the political aisle to continue at the helm of these” plans.
With 240 of the 543 seats in the Lok Sabha, or lower house, the BJP is still by far India’s most dominant political force. After negotiations with its kingmaker partners, it retained crucial ministries and many of its old ministers in the same portfolios, a sign investors took as a reassuring message of continuity.
While corporate leaders claim their investment plans remain unchanged, many will quietly begin hedging political bets in a way they have been unused to for a decade. Indian industrialists, executives, lobbyists and analysts told the Financial Times that many remained fearful of being seen to talk out of turn about the prime minister.
Business leaders that dared question Modi, his government or the quality of India’s economic trajectory were, as with other critics, subjected to vitriolic attacks or hit with abrupt tax raids.
During the weeks-long campaign Modi veered off course with an unprecedented condemnation against Ambani and Adani, accusing them of funnelling “truckloads” of illicit funds to his opposition rivals.
“It was quite amazing he attacked Adani and Ambani — we are still trying to figure it out,” said a tycoon who attended Sunday’s swearing-in and was trying to read the “tea leaves” of India’s new political landscape. “We will have to wait and watch if there’s a change of style.”
That may play out across India’s press. Controlled by big corporations with interests across multiple industries dependent on government goodwill — Ambani and Adani own expansive television networks — the mainstream media has played cheerleader to the BJP.
“A degree of sycophancy towards Modi may disappear, businesses will feel less of a need to pander and praise as much as they did before and less reticent engaging with the opposition,” said the head of one business lobby.
“People didn’t want to be seen with Rahul Gandhi and the Congress,” they added, referring to India’s main opposition party and leader.
In an article published after the vote, Aroon Purie, a media mogul and chair of the India Today Group, criticised the “pervasive sense of fear” the last administration cultivated, with businesses scared of “getting on the wrong side of the government”.
“Perhaps the past regime would not have faced this electoral fate if it hadn’t lived in its echo chambers,” Purie wrote.
The BJP’s “tight control” over institutions such as the media “will show some cracks”, said Nirmalya Kumar, a former Tata executive and now Lee Kong Chian professor at Singapore Management University.
“Those people now fear that if the other party comes into power we can’t be seen to be so close to Modi,” he said. “They want to start hedging their bets.”
Some Indian executives had privately grumbled about top-down government requests to invest in BJP stronghold states, such as Gujarat. “There might be possible diversification across states to appease some of the coalition parties,” said one western diplomat.
Analysts expect Modi’s alliance to stay the course on building out India’s infrastructure, after boosting such spending to a record.
But after fostering a “Billionaire Raj” during his tenure, where 1 per cent of India’s 1.4bn people earn more than a fifth of its wealth, according to a recent study by economists, including Thomas Piketty, the main question is whether Modi will aggressively pursue further welfare spending.
More handouts would spur consumption and stimulate private capital investment that has calcified at about 25 per cent of GDP, said one business leader. “This little rap on the knuckles is good for [Modi] and the economy,” they said. “What worries me is that this does not lead to any paralysis of reform.”
While economists expect Modi will struggle to reform land and labour laws to make India a more attractive manufacturing destination, foreign corporations are unlikely to alter their view on the world’s fastest-growing big economy.
“Bottom line, things are not going to change — from an economic perspective the coalition parties are not that different,” said Kumar. “With the slowdown in China, it is the must-win market for every multinational.”
At Sunday’s swearing-in event in New Delhi, Adani and Ambani hobnobbed with fellow corporate leaders, politicians and Bollywood stars Shah Rukh Khan and Akshay Kumar.
“It would appear [Modi] has decided to back certain horses, these are the Hyundais, these are the Samsungs of India,” said Swaminathan Aiyer, research fellow at Washington’s Cato Institute, referring to the chaebol conglomerates that dominate South Korea’s economy. “He thinks these guys can do it.”
Data visualisations by Janina Conboye