State Capture and Corporate Collusion: How the Modi-Adani Nexus Reengineered Indian Governance, Exploited Public Assets, and Enriched a Monopolistic Empire

The investigative findings reveal a systematic, state-backed mechanism through which Prime Minister Narendra Modi and industrialist Gautam Adani have restructured regulatory frameworks, diverted critical public resources, and suppressed democratic oversight. By converting legislative power into commercial monopoly, this alliance has placed core infrastructure—including ports, airports, coal reserves, and energy grids—under single-entity control. Consequently, this concentration of wealth and power has generated profound socio-economic destabilization, systemic financial vulnerabilities, and widespread dispossession for India’s 1.4 billion citizens.

By Rakesh Raman
New Delhi | October 31, 2026

INVESTIGATIVE REPORT

1. The Genesis of the Modani Partnership: From Post-2002 Gujarat to National Power

The structural alignment between political leadership and corporate expansion rarely emerges by chance; it is typically forged during moments of acute political vulnerability. Following the 2002 Godhra train incident and the subsequent communal violence across Gujarat, then-Chief Minister Narendra Modi found himself largely isolated on both international and domestic fronts. Major trade bodies and prominent business leaders openly condemned the state administration’s failure to maintain public order.

The former president of India’s premier business association, the Confederation of Indian Industry (CII), publicly declared before national news media that Gujarat had lost an entire year of economic progress, signaling a severe withdrawal of corporate confidence and capital investment.

Concurrently, political colleagues within Modi’s own party turned against him, invoking classic principles of moral governance by declaring that a ruler cannot discriminate among citizens based on religion, caste, or creed. In this period of existential crisis, Gautam Adani, then a rising first-generation commodities trader and port operator, intervened to engineer a strategic political lifeline.

These are among the findings of a new 2026 documentary: The Friendship Files | How Modi and Adani Stole India. Adani broke ranks with the established corporate leadership to assemble a faction of loyal regional industrialists under the moniker “Resurgent Group of Gujarat.” This strategic entity was specifically designed to counter global and domestic criticism, reframing international condemnation as a coordinated campaign to defame the state of Gujarat. To solidify this political defense, Adani orchestrated a dramatic financial commitment at the 2003 Vibrant Gujarat summit, publicly pledging an investment of 15,000 crore rupees into state projects.

According to the documentary, this bold gesture transformed Modi’s political narrative from that of an isolated provincial administrator into a forward-looking “development icon.” In the immediate aftermath, the CII was forced to issue an unprecedented public apology to Modi, effectively neutralizing corporate resistance to his leadership. In return, the political state provided the commercial backing and regulatory support necessary to accelerate Adani’s corporate trajectory.

The Cyclical Mechanism of State Capture: Legislative and executive power manufactures tailored laws, regulatory exemptions, and subsidized land allocations. These state-facilitated advantages allow the favored corporate entity to capture core public assets and extract super-normal profits. In turn, a portion of this generated wealth is recycled back into political defense, media control, and electoral financing, thereby consolidating and perpetuating political power.

This symbiotic relationship culminated symbolically on May 22, 2014. Following the landmark electoral victory that brought the Bharatiya Janata Party (BJP) to power, Narendra Modi departed Gujarat to assume the office of Prime Minister in New Delhi aboard a luxury private aircraft emblazoned with the Adani corporate logo. This public display signaled an unprecedented consolidation of corporate and state interests.

Mutual political defense and financial backing created a self-reinforcing cyclical mechanism: political power manufactured highly tailored regulatory exemptions, while state-facilitated commercial dominance generated the massive capital required to sustain electoral dominance. This political consolidation of 2014 laid the immediate groundwork for an aggressive, state-assisted acquisition of physical land, industrial infrastructure, and natural resources across the nation.

2. Systematic Land Allocations and Valuations: Disparity in Public Resource Distribution

Public land allocation represents one of the most direct mechanisms through which a state can grant artificial competitive advantages to favored entities. In Gujarat, the strategic expansion of the Adani Group’s flagship port at Mundra was facilitated through expansive state land grants offered at nominal prices unavailable to other market participants.

Between 2003 and 2011, state land allocations to the Adani Group expanded rapidly, eventually encompassing nearly 15,000 acres—an area equivalent to roughly half the size of Chandigarh. These vast tracts of coastal and industrial land were transferred to Adani Enterprises at starting rates as low as 1 rupee per square meter.

To evaluate whether these allocations represented standard industrial development incentives or exclusive preferential treatment, public land valuation rates granted to rival corporate entities during the same period under the same state administration must be examined:

Corporation Name	Project Location / Purpose	Allocation Rate (INR per Square Meter)
Adani Group	Mundra Port and Special Economic Zone	1 Rupee
Ford Motors	Vehicle Manufacturing Plant	100 Rupees
Tata Motors	Nano Industrial Manufacturing Plant	900 Rupees

 

The valuation disparity reveals that rival global manufacturers paid between 100 and 900 times more per square meter for industrial land within Gujarat. While state representatives argued that Mundra land was uncultivated waste ground requiring extensive capital investment, this logic was completely undermined by subsequent land allocations conducted outside Gujarat.

In Bhagalpur, Bihar, the state administration granted the Adani Group 1,000 acres of highly fertile, tree-covered land for a mega power plant project under a 25-year lease at the rate of just 1 rupee annually, totaling 5 rupees over the quarter-century term. Famous across India for its productive mango orchards, the region suffered severe environmental degradation when over 10 lakh trees were felled to clear the site for industrial construction, devastating local agrarian ecosystems and rural livelihoods.

The stark contrast between the political rhetoric of transparent, competitive industrial development and the operational reality reveals an economic structure built on valuation subsidies granted exclusively to one conglomerate. By systematically lowering capital acquisition costs for Adani while maintaining standard market rates for competitors, the state effectively eliminated real market competition. This rapid accumulation of subsidized land provided the structural base required to re-engineer administrative frameworks across coal extraction and national transportation networks.

3. Administrative Re-Engineering: Policy Manipulation in Coal and Infrastructure

When physical asset accumulation required legislative and administrative backing, executive mechanisms were restructured to remove bureaucratic resistance and guarantee market dominance for the Adani Group. A clear example occurred within the Union Ministry of Coal during the restructuring of national coal block auctions.

Coal Secretary Anil Swarup, a senior gold-medalist IAS officer who had established live, transparent digital auctions following previous allocation scandals to restore public trust in governance, resisted executive interference. Swarup received repeated communications from the Prime Minister’s Office (PMO) inquiring whether coal reserves could be directly allocated to select private industrialists. Swarup maintained that statutory procedures required open, competitive live auctions. Shortly thereafter, Swarup was abruptly transferred out of the Coal Ministry. Following his removal, administrative rules were adjusted to introduce a “reverse bidding” framework.

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Under standard commercial auctions, mining rights were awarded to the entity offering the highest financial return to the public exchequer. The new reverse bidding rule stipulated that coal rights would instead be awarded to the bidder offering the cheapest electricity rate to the public. This structural shift inherently favored conglomerates possessing an integrated, pre-existing logistics and supply network.

Because the Adani Group already controlled major private power plants, dedicated rail links, and private port facilities, it was uniquely positioned to outbid competitors who lacked such infrastructure. Consequently, the Adani Group captured one-third of all cheap government coal allocations under this revised framework.

The Dual Regulatory Paradox: In the coal sector, the state raised regulatory barriers by introducing reverse bidding rules that required extensive pre-existing logistics, effectively excluding small competitors and new entrants. Conversely, during the 2018 privatization of six national airports, the state eliminated mandatory operational experience requirements and ownership caps. Although these policy changes were diametrically opposed in logic, both modifications directly favored the exact same entity: excluding rivals in coal while creating an unprecedented shortcut for an inexperienced newcomer in aviation.

Specifically, when the government initiated the privatization of six major, highly profitable national airports in 2018, regulatory rules were altered in the exact opposite direction:

1. Removal of Operational Requirements: The mandatory rule requiring bidders to possess prior operational experience in airport management was completely abolished.
2. Removal of Ownership Caps: Statutory caps limiting the number of privatized airports a single corporate entity could bid for or win were eliminated.

The Modi-Adani documentary explains that these specific policy modifications allowed the Adani Group—which possessed zero prior experience in operating airports—to submit bids for all six facilities and win every single airport contract. This regulatory manipulation demonstrates how policy was restructured across multiple ministries to secure commercial monopolies. When regulatory tweaks alone were insufficient to secure prime infrastructure, state enforcement machinery was deployed to force corporate asset transfers directly.

4. State-Assisted Asset Acquisitions, Media Capture, and Digital Censorship

When regulatory restructuring alone proved insufficient to secure prime infrastructure, state investigative machinery was deployed to induce corporate compliance and force the transfer of assets to the Adani Group.

A clear example of state-assisted corporate acquisition occurred in the takeover of Mumbai International Airport from the GVK Group. The GVK Group had operated the highly profitable airport since 2006 and was finalizing legitimate debt-refinancing agreements with foreign institutional investors from Abu Dhabi and Canada to retain operational control. In mid-2020, the Central Bureau of Investigation (CBI) registered a fraud case against GVK executives, immediately followed by raids conducted by the Enforcement Directorate (ED) on GVK business premises.

Under severe legal and financial pressure, GVK capitulated. In August 2020, the Adani Group acquired Mumbai Airport. While GVK’s chairman later stated on television that there was no corporate pressure to sell, the statement was broadcast on New Delhi Television (NDTV)—a network that had itself been subjected to state tax raids, regulatory pressure, and a hostile takeover by the Adani Group, resulting in the resignation of independent journalists.

A similar pattern occurred in the energy sector with Coastal Energy founder Ahmed Bukhari. ED authorities held Bukhari in detention for 32 months. By the time he was exonerated of all wrongdoing and released, his firm’s 1,200 megawatt power plant had been transferred to the Adani Group.

To shield these asset transfers and regulatory changes from public scrutiny, state authority has been routinely deployed to suppress critical journalism and digital media:

• Sabeer Bhatia Documentary Takedown: In October 2026, the High Court in Kolkata issued an injunction ordering YouTube, X (formerly Twitter), and Meta to take down an online documentary produced by Hotmail co-founder Sabeer Bhatia. The documentary detailed allegations of cronyism involving Modi and Adani. Adani Enterprises had filed a defamation suit claiming the film contained false content that prompted nervous inquiries from foreign investors.
• Censorship of the BBC Series: In January 2023, the Union government invoked emergency power provisions under the Information Technology Rules to block all links and broadcasts of the two-part BBC series India: The Modi Question. The documentary examined Narendra Modi’s operational role during the 2002 Gujarat violence, citing an official UK foreign office inquiry that held Modi directly responsible for creating the climate of impunity that enabled the riots. International human rights organizations, including Human Rights Watch, confirmed these findings, noting that state authorities actively suppressed the documentary to prevent public evaluation of Modi’s record.

Through judicial intimidation, coercive regulatory enforcement, media takeovers, and digital censorship, the state apparatus has functioned to dismantle democratic accountability and enforce silence surrounding the Modani alliance. This state-backed corporate consolidation has exposed public financial institutions, national security, and diplomatic relations to unprecedented vulnerabilities.

5. Public Financial Risk, National Security Vulnerabilities, and Foreign Affairs

The structural integration of the Adani Group into state operations extends beyond domestic infrastructure, exposing India’s public savings, national security, and diplomatic relations to severe systemic risk.

To finance its rapid acquisition of domestic infrastructure, the Adani Group relied heavily on state-owned financial institutions. The Life Insurance Corporation of India (LIC)—which holds the life savings of hundreds of millions of working-class citizens—funneled an estimated 48,000 crore rupees into Adani equity and debt instruments. This concentration of public savings in a single corporate group created acute exposure for ordinary policyholders.

Concurrently, national security vulnerabilities emerged through the expansion of Adani Defence and Aerospace, which partnered with Israeli defense contractor Elbit Systems to manufacture military hardware, including drones, missiles, and anti-submarine sonobuoys. This defense footprint became particularly concerning given repeated security breaches at Adani-controlled transport hubs, most notably at Mundra Port in Gujarat:

• June 2021 Security Breach: An untracked shipping container originating from Kandahar, Afghanistan, passed through Bandar Abbas, Iran, and entered Mundra Port. Supposedly containing talcum powder, the shipment actually carried 300 kilograms of high-grade heroin. It passed through the port without inspection, was transported to a warehouse in Delhi, and vanished into the domestic market.
• September 2021 Seizure: Three months later, on September 13, 2021, the Directorate of Revenue Intelligence (DRI) intercepted two containers on the exact same transit route at Mundra Port. Official documents declared the cargo as talcum powder, but agents discovered 2,988 kilograms of heroin valued at 21,000 crore rupees—the largest single narcotics seizure in Indian history.
• Lashkar-e-Taiba Terror Funding Link: The National Investigation Agency (NIA) subsequently informed the Supreme Court that the narcotics syndicate was directly linked to funding Lashkar-e-Taiba, the terrorist organization responsible for major attacks in Jammu and Kashmir, including the Pahalgam attack. The NIA confirmed that at least five previous drug shipments had successfully entered India via the Mundra Port route.

When a special court questioned how port management failed to detect recurring multi-ton narcotics shipments passing through its facilities, Adani representatives argued that as a private port operator, the firm merely provided commercial services and exercised no operational control over container contents. Government agencies accepted this explanation without altering port operations.

Diplomatically, the Modi administration has repeatedly leveraged state foreign policy to secure international contracts for the Adani Group:

• Sri Lanka: In 2022, a senior Sri Lankan energy official publicly disclosed that Prime Minister Modi pressured Sri Lankan President Gotabaya Rajapaksa to directly award power and port projects to the Adani Group without competitive bidding.
• Norway: Following decision-making by Norway’s sovereign wealth fund to blacklist the Adani Group over corruption and environmental governance concerns, diplomatic visits were conducted to realign trade discussions.
• United States: Following bribery and corruption indictments brought against Adani executives by federal prosecutors in the United States, the Indian government pursued concessions in international trade negotiations.
• Global Footprint: Similar state-backed interventions and commercial concessions for Adani projects occurred across Greece, Bangladesh, Australia, Israel, Nepal, and Tanzania.

The systemic fragility of relying on a single corporate entity was exposed on January 24, 2023, when US-based short-seller Hindenburg Research published a 106-page forensic investigation. The report alleged that the Adani Group had engaged in corporate accounting fraud, brazen stock manipulation, and the offshore inflation of equity valuations over decades. The disclosure triggered a financial sell-off that erased over 100 billion dollars in stock market value within days. Despite the profound threat posed to public financial institutions like LIC, state officials defended the conglomerate, insisting that any economic challenge to Adani constituted an attack on the sovereignty of India itself.

6. Socio-Economic Dispossession and the Human Cost of the Modani Regime

While the Modani nexus has generated vast wealth for a concentrated elite, the operational reality for ordinary citizens across rural and urban India has been defined by dispossession, environmental destruction, and economic degradation.

In the agrarian belts of Jharkhand and Chhattisgarh, indigenous populations resisting the expansion of Adani mining projects faced state violence and legal prosecution. Suryanarayan Hemrom, a Santhali tribal farmer, attempted to defend his ancestral land against forced corporate acquisition. In response, Hemrom was physically assaulted by state police and formally charged with criminal trespassing for standing on his own ancestral property.

Similar patterns of displacement have unfolded among traditional fishing communities in Kerala opposing deep-water port construction, farmers in the Kutch region losing agricultural land, and indigenous communities resisting the clearance of the Hasdeo forests, where over 10 lakh trees face destruction to accommodate coal mining operations.

Monopolistic Penetration of Transport and Consumer Markets: Through state-backed acquisitions, the Adani Group has established dominant market share across key transport corridors, handling nearly 1/4 (25 percent) of all maritime cargo across India, while controlling 1/4 of domestic air passenger traffic and 1/3 of national air cargo.

Daily citizen existence is increasingly routed through Adani infrastructure: Himachal apple prices are dictated by Adani Agri Fresh; household grains pass through Adani Agri Logistics; domestic cooking gas is distributed by Adani Total Gas; building cement is manufactured by Adani-owned Ambuja and ACC; national highways across nine states are managed by Adani Road Transport; municipal water distribution is managed by Adani Water Limited; electricity grids run on Adani Power generated from coal extracted by Adani Mining; and public information is shaped by NDTV and the IANS news network.

Research compiled by the RMN News research hub under the title Narendra Modi: Twelve Years of Misrule and the Illusion of Growth? documents the severe economic realities facing India’s 1.4 billion citizens. While national policy was systematically adjusted to build corporate monopolies, broader socio-economic indicators degraded rapidly:

• Extreme Wealth Disparity: Gautam Adani’s personal net worth surged past 5 lakh crore rupees, expanding from 9,62,322 crore rupees in December 2021 to 18,64,579 crore rupees in December 2022—an unprecedented increase of over 9 lakh crore rupees in a single twelve-month window. Data published by the World Inequality Lab reveals that income and wealth inequality in India under the current administration has surpassed levels recorded during the British Raj.
• Economic Stagnation: Despite official claims of unprecedented national growth, ordinary citizens confront historically high youth unemployment, severe wage stagnation, persistent food inflation, systemic corruption, and lawlessness.

The transformation of India’s mixed economy into a centralized oligarchy has trapped citizens within a corporate framework where basic daily survival requires payments to a single state-backed conglomerate. As democratic dissent is criminalized and public assets are absorbed into private balances, the public increasingly confronts the reality that national resources have been deployed to serve private wealth accumulation. Addressing this concentration of power remains the central challenge for democratic accountability in India.

FREQUENTLY ASKED QUESTIONS (FAQs)

What is the Modani collusion discussed in RMN News reports?

The term Modani describes the structural, mutually beneficial alliance between Indian Prime Minister Narendra Modi and billionaire Gautam Adani. According to investigative findings, this relationship began in post-2002 Gujarat when Adani provided political defense and investment commitments for Modi in exchange for subsidized land and political support.

Over the past decade, this partnership transformed into state capture, where regulatory policies, auction rules, and investigative agencies were systematically deployed to grant the Adani Group monopolistic control over critical national assets, including airports, sea ports, coal reserves, and power grids.

How was the BBC documentary on Narendra Modi censored in India?

In January 2023, the British Broadcasting Corporation (BBC) released a two-part documentary titled India: The Modi Question, detailing Narendra Modi’s role during the 2002 Gujarat violence and citing a UK government inquiry that held him directly responsible for the climate of impunity. The Indian government invoked emergency executive powers under the Information Technology Rules to mandate that social media platforms, including YouTube and Twitter, take down all links and video clips of the series.

Independent human rights organizations, including Human Rights Watch, confirmed that digital censorship was utilized to suppress public debate and prevent citizens from evaluating official findings regarding state complicity in the violence.

What security concerns were raised regarding Adani’s Mundra Port?

Serious national security concerns emerged following repeated large-scale drug seizures at the Adani-operated Mundra Port in Gujarat. In June 2021, an untracked container carrying 300 kilograms of heroin passed through the port uninspected and entered the domestic market. In September 2021, the Directorate of Revenue Intelligence seized 2,988 kilograms of heroin valued at 21,000 crore rupees at Mundra Port.

Court filings by the National Investigation Agency confirmed that drug proceeds from this route were actively funding Lashkar-e-Taiba, the terror group responsible for attacks in Jammu and Kashmir. When questioned by a special court regarding security lapses, Adani representatives claimed that as a private operator, the company holds no control over container contents, an explanation accepted by government authorities.

How have international governments and agencies responded to Adani projects?

International governments and financial bodies have repeatedly identified systemic corruption, bribery, and market manipulation within Adani operations. In 2022, a senior Sri Lankan energy official publicly revealed that Prime Minister Modi pressured Sri Lanka’s president to directly award power projects to Adani without competitive bidding.

Norway’s sovereign wealth fund blacklisted the Adani Group following corruption investigations. In the United States, federal authorities registered bribery and fraud charges against Adani executives. Furthermore, a 106-page forensic report by US short-seller Hindenburg Research exposed widespread stock manipulation and accounting fraud, erasing over 100 billion dollars in market valuation and raising global concerns regarding the firm’s corporate governance.

This report is part of the ongoing research: “Narendra Modi: Twelve Years of Misrule and the Illusion of Growth?”

By Rakesh Raman, who is a national award-winning journalist and social activist. He is the founder of a humanitarian organization RMN Foundation which is working in diverse areas to help the disadvantaged and distressed people in the society.