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The twoMPEUYour browser does not support the element. deals, worth some $2.5bn, were meant to boost Kenya’s creaking infrastructure. Yet the country’s s roared with delight on November 21st as William Ruto, the president, told them his government would not lease Kenya’s main international airport to the Adani Group, an Indian conglomerate, and would cancel a separate agreement with an Adani company to build new transmission lines. After months of controversy over the allegedly unfavourable terms of the deals, the decision was clinched when American prosecutors filed charges against Gautam Adani, the group’s boss, for conspiring to bribe Indian officials (he denies the charges).The episode does not just cast doubt on Adani’s investments in Kenya and across Africa. It also has implications for other big Indian companies operating on the continent, and for the geopolitical ambitions of Narendra Modi, India’s prime minister, who has close ties with Mr Adani.India’s connection with Africa is long-standing. Indian traders first began sailing their ships along the Swahili coast centuries ago. An Indian architect designed several of Ethiopia’s imperial landmarks. Kenya’s British colonial-era railway was built by indentured Indian labourers. A sense of camaraderie that grew from all being former colonies brought India and many African countries together in the “Non-Aligned Movement” that sought to circumvent and exploit Cold War rivalries. Many members of India’s diaspora of around 3m people do business across the continent.Under Mr Modi, who has been in power since 2014, India has sought to intensify its links with Africa. Between 2018 and 2022 Indian investment in the continent exceeded $26bn, bringing it to more than five times the amount over the previous five years. India today is the second-biggest bilateral creditor to Africa after China. With a total trading volume of $83bn in 2024, it is now also Africa’s third-largest trading partner after China and the .Beyond advancing its economic interests, India’s push into Africa is part of its bid to claim leadership of the global south amid rivalry with China. India has ramped up its diplomatic presence, opening new embassies and dispatching ministers and business delegations. In November Mr Modi visited Nigeria, while Droupadi Murmu, India’s president, toured Algeria, Mauritania and Malawi.Adani, the corporate face of Mr Modi’s India, has played a big role in this push for influence. The group recently signed a contract to operate a big shipping terminal in Tanzania, where it is touting a $900m project for electricity power lines. It is eyeing deals in Egypt, Morocco and Zambia.Now Adani looks like a liability. Before Mr Adani’s troubles in Kenya, most big Indian investments in Africa had been seen as politically innocuous. Indian firms were widely praised for hiring locals and, on the whole, avoided the sort of corruption or environmental scandals which can make companies politically toxic in Africa. Unlike Chinese ones, they were considered independent of the Indian state. Mr Modi’s government had worked to improve transparency in schemes previously plagued by graft allegations, such as India’s flagship subsidised credit programme.Yet the Adani episode is a reminder that India Inc remains far from spotless. And Mr Modi’s close ties to Mr Adani may throw doubt on the sincerity of his government’s commitment to fight corruption. It may also revive interest in the shortcomings of other Indian firms. Last year Vedanta Resources, owned by an Indian billionaire, Anil Agarwal, agreed to a $1bn settlement with Zambia’s government in order to reclaim copper mines it had been accused of leaving idle. Earlier this year Kenya’s government threatened to close Africa’s largest soda-ash factory, owned by Tata Chemicals, over a tax dispute.With Adani gone, Africans may also remember that the performance of big Indian firms on the continent has often been underwhelming. Take the Tata Group, perhaps India’s most venerable conglomerate. It first arrived in Africa in the 1970s and in 2013 announced a major new drive for African markets. But in recent years it has sold off some of its African operations and abandoned big mining projects in Madagascar and Côte d’Ivoire.That points to a further challenge: competition from China. For Kenya and other African countries, the appeal of Adani lay in its ability to build the huge infrastructure that Africa sorely needs, without some of the risks associated with Chinese investors. But beyond Adani, Indian firms in key sectors such as construction struggle to match their state-backed Chinese rivals. “India just doesn’t have the resources to do such big projects as China,” says Barnaby Dye of King’s College London. The number of infrastructure contracts awarded to Indian companies has fallen, according to the African Development Bank. Indian construction firms complain their government does too little to help them.The future of Indian investment in Africa may instead lie beyond large infrastructure and politically connected conglomerates. Ashish Patel of Aavishkaar Capital, a Kenya-based investor, describes India Inc’s strength as being “physical asset light, intellectual capital heavy”. Examples include tech companies and digital public-infrastructure innovations. Smaller firms will probably continue to blaze India’s path with little support from the state, whether or not bigger rivals join them.
