Congress criticises Adani's China venture, warns of national security risks

The Congress' criticism comes amid reports that the Adani Group has formed a subsidiary in China to carry out the business of providing supply chain solutions and project management services

In a statement issued on Tuesday (September 10) Congress General Secretary Jairam Ramesh criticised the Adani Group’s investment plans in China, warning that the move could undermine India’s national security. 

“With the Adani Group planning to invest in China, it appears that the clean chit to China is all set to become a letter of support,” the Congress leader said in a press statement.

The national party’s criticism comes amid reports that the Adani Group has formed a subsidiary in China to carry out the business of providing supply chain solutions and project management services, according to a regulatory filing.

Adani’s China operations

Adani Enterprises, the flagship company of the Adani Group, revealed in an exchange filing that a Singapore-based subsidiary established a fully-owned entity, Adani Energy Resources (Shanghai) Co (AERCL), based in Shanghai, China, on September 2, 2024.

“AERCL is incorporated to carry out the business of providing supply chain solutions and project management services,” it said without providing details.

This new subsidiary was set up by Adani Global Pte (AGPTE), a step-down unit of Adani Enterprises Ltd (AEL). AEL oversees the conglomerate’s businesses in mining, roads, airports, data centres, and water infrastructure.

“AERCL has been incorporated and registered under the laws of Company Law of the People's Republic of China on September 2, 2024,” the filing said. AERCL is yet to commence its business operations.

Suspicions on Adani’s previous dealings in China

Ramesh’s statement also raised concerns about the Adani Group’s previous dealings in China and East Asia, highlighting alleged suspicious connections. He referred to Chang Chung-Ling, a Taiwanese businessman linked to the Adani Group, who was involved in a 2017 oil-smuggling incident that violated United Nations sanctions on North Korea. 

The ship involved in the incident was reportedly financed by a company tied to Adani’s Shanghai operations, raising further questions about the group’s activities in the region.

“This subordination of India’s foreign policy interests to the Adani group’s commercial interests has led to unprecedented reversals for India on the global stage,” Ramesh said.

The Congress further alleged that the Adani Group’s overseas ventures, particularly in Bangladesh, Sri Lanka, and Australia, have already hurt India’s foreign relations. Ramesh warned that the group’s investments in China could exacerbate these issues, risking both national security and territorial sovereignty.

'PM Modi’s lax economic policy against China'

Ramesh also accused the government of adopting a lax economic policy towards China, following Prime Minister Narendra Modi’s “clean chit” to the neighbouring country in 2020.

Ramesh described the Prime Minister’s 2020 remarks, which suggested no Chinese intrusion into Indian territory, as one of the most damaging statements made by any Indian leader. He alleged that the Prime Minister’s declaration emboldened China to continue its territorial occupation and laid the groundwork for India’s inadequate response to Chinese economic threats, including unchecked imports, investments, and immigration.

The Congress leader also pointed out that while other countries have taken aggressive measures to counter Chinese imports and decouple their economies from China, India has allowed Chinese imports to surge. He criticised the government’s decision to fast-track visas for Chinese workers and encourage investments from China, saying that these actions could be detrimental to India’s economic and national security interests.

“The government’s policies on China have been grossly inadequate,” Ramesh stated, adding that the Prime Minister’s close relationship with Adani has prioritised corporate interests over national interests.

As the debate over the Adani Group’s China investments intensifies, the Congress called for a re-evaluation of India’s economic and diplomatic policies towards its powerful northern neighbour.

(with inputs from agencies)