Uncovering Alleged Overpricing: Adani Group’s Coal Imports and India’s Electricity Costs

Ahmedabad : The article appeared in the Financial Times investigates allegations that the Adani Group, a major Indian conglomerate with close political ties, imported billions of dollars worth of coal at prices significantly higher than market rates.

The data reviewed in the report suggests that Adani, India’s largest private coal importer, may have inflated fuel costs, causing Indian consumers and businesses to overpay for electricity.

The investigation reveals that over the past two years, Adani used offshore intermediaries in Taiwan, Dubai, and Singapore to import $5 billion worth of coal at prices often more than double the market price. One of these intermediary companies is owned by a Taiwanese businessman who was previously identified as a hidden shareholder in Adani companies.

The Financial Times examined 30 shipments of coal from Indonesia to India by an Adani company over a 32-month period between 2019 and 2021. In all cases, the prices in import records were significantly higher than those in corresponding export declarations. During the journey, the combined value of the shipments increased by over $70 million, which raised questions.

The Adani Group has denied any wrongdoing and termed the Financial Times’ story as based on “old, baseless allegations” and “selective misrepresentation of publicly available facts and information.”

The allegations of inflating fuel costs were initially made seven years ago by the Directorate of Revenue Intelligence (DRI), India’s finance ministry’s investigative unit. They accused several Adani companies of “artificially inflating” the value of Indonesian coal to overcharge power companies. The investigation noticed significant overvaluation, often between 50 to 100 percent.

This report raises questions about the relationship between the Adani Group and the administration of Prime Minister Narendra Modi, as Adani is known for its close ties to the government. Founder Gautam Adani has been called “Modi’s Rockefeller,” and his group has seen tremendous growth over the past decade. However, the value of his group’s companies saw a significant drop after being accused of financial irregularities.

The Financial Times’ investigation implies that Adani, through its use of intermediaries and overpricing of coal, may have benefitted at the expense of Indian consumers and businesses.

While Adani Group disputes these allegations, they have attracted political attention, and questions surrounding the practices of major corporations and their relations with the government remain unresolved.

Congress general secretary Jairam Ramesh has saidi that more than Rs 12,000 crore may have been siphoned out of the country in two years. He (Ramesh) stated that it was ‘not a metaphorical loot but literally theft’ from the pockets of crores of Indians.